by Larry Karp and Jinhua Zhao
- We provide a unified discussion of the issues that confront negotiators of the next international climate agreement. We offer a novel proposal that entitles countries to discharge their treaty obligations by paying a "fine". This escape clause provides cost insurance, simplifies the problem of enforcing compliance, and increases incentives to participate in the agreement. We explain why developed country obligations should rely on a cap and trade commitment rather than carbon taxes. A Central Bank maintains stability of carbon prices by defending a price ceiling and floor.
Karp, L. and J. Zhao (2009). http://repositories.cdlib.org/are_ucb/1085
"Suggestions for the Road to Copenhagen." Department of Agricultural & Resource Economics, UCB. CUDARE Working Paper 1085, June 2009.
