NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Public Policies against Global Warming

Hans-Werner Sinn

NBER Working Paper No. 13454
Issued in September 2007
NBER Program(s):   EEE   PE

Judged by the principle of intertemporal Pareto optimality, insecure property rights and the greenhouse effect both imply overly rapid extraction of fossil carbon resources. A gradual expansion of demand-reducing public policies -- such as increasing ad-valorem taxes on carbon consumption or increasing subsidies for replacement technologies -- may exacerbate the problem as it gives resource owners the incentive to avoid future price reductions by anticipating their sales. Useful policies instead involve sequestration, afforestation, stabilization of property rights and emissions trading. Among the public finance measures, constant unit carbon taxes and source taxes on capital income for resource owners stand out.

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Document Object Identifier (DOI): 10.3386/w13454

Published: "Public Policies against Global Warming: a supply side approach“, International Tax and Public Finance 15 (4), 2008, pp. 360-394; (Download, 1.9 MB); CESifo Working Paper No. 2087, August 2007; (Download, 841 KB).

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