April 25, 2011

Climate Effects of Carbon Taxes, Taking into Account Possible Other Future Climate Measures

by Florian Habermacher and Gebhard Kirchgässner

- The increase of fuel extraction costs as well as of temperature will make it likely that in the medium-term future technological or political measures against global warming may be implemented. In assessments of a current climate policy the possibility of medium-term future developments like backstop technologies is largely neglected but can crucially affect its impact. Given such a future measure, a currently introduced carbon tax may more generally mitigate climate change than recent reflections along the line of the Green Paradox would suggest.

Habermacher, F. and G. Kirchgässner (2011). "Climate Effects of Carbon Taxes, Taking into Account Possible Other Future Climate Measures." CESifo Working Paper No. 3404, Mar 2011.