Dynamic Climate Policy with Both Strategic and Non-Strategic Agents : Taxes Versus Quantities

Karp, Larry ; Siddiqui, Sauleh ; Strand, Jon

World Bank, Washington, DC

关键词: ABATEMENT;    ACCOUNTING;    AGGREGATE DEMAND;    AGGREGATE SUPPLY;    AVERAGE PRODUCTION COSTS;   

DOI  :  10.1596/1813-9450-6679
RP-ID  :  WPS6679

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper studies a dynamic game whereeach of two large blocs, of fossil fuel importers andexporters respectively, sets either taxes or quotas toexercise power in fossil-fuel markets. The main novelfeature is the inclusion of a "fringe" of non-strategic (emerging and developing) countries which bothconsume and produce fossil fuels. Cumulated emissions overtime from global fossil fuel consumption create climatedamages which are considered by both the strategic importerand the non-strategic countries. Markov perfect equilibriaare examined under the four combinations of trade policiesand compared with the corresponding static games whereclimate damages are given (not stock-related). The mainresults are that taxes always dominate quota policies forboth the strategic importer and exporter and that"fringe"countries bene?t from a tax policy ascompared with a quota policy for the strategic importer, asthe import fuel price then is lower, and the strategicimporter's fuel consumption is also lower, thus causingfewer climate damages.