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When a National Cap-and-Trade Policy with a Carve-out Provision May Be Preferable to a National CO2 Tax.
- Source :
- Energy Journal; Jul2015, Vol. 36 Issue 3, p189-207, 19p
- Publication Year :
- 2015
-
Abstract
- We analyze the effect of various combinations of state and national emissions policies on national emissions of a global pollutant, specifically, greenhouse gas emissions. We highlight the effect of unintended increases in out-of-state emissions on the efficacy of overlapping state policies. We show that emission taxes do not necessarily prevent a completely offsetting increase in out-of-state emissions when states add a state-level emissions tax to the national emissions tax. In particular, states small relative to their market will be unable to reduce national emissions with a state-level CO<subscript>2</subscript> tax or a system of tradable permits. However, under a national cap-and-trade regime that allows states to be carved out, a state of any size can reduce national emissions by setting a tighter state cap. This combination yields a lower total cost than the equivalent combination of national and state CO<subscript>2</subscript> taxes (if one exists) but increases the cost to consumers outside the market. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 01956574
- Volume :
- 36
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- Energy Journal
- Publication Type :
- Academic Journal
- Accession number :
- 103358827
- Full Text :
- https://doi.org/10.5547/01956574.36.3.macc