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Incomplete International Climate Agreements: Optimal Carbon Taxes, Market Failures and Welfare Effects

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  • Rolf Golombek
  • Jan Braten

Abstract

This paper provides an empirical study of optimal carbon taxes and welfare effects under incomplete international climate agreements when there are market failures in the cooperating countries. The objective of the group of countries taking part in the international climate agreement is to design carbon taxes that maximize their aggregate net income, subject to a constraint on global CO2 emissions. We use a numerical energy model to study scenarios that differ with respect to types of CO2 taxes and countries taking part in the climate agreement. We also discuss the impact on regional net income following from different international climate agreements.

Suggested Citation

  • Rolf Golombek & Jan Braten, 1994. "Incomplete International Climate Agreements: Optimal Carbon Taxes, Market Failures and Welfare Effects," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 141-166.
    • Handle: RePEc:aen:journl:1994v15-04-a07
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    1. Jean-Marc Burniaux & John P. Martin & Giuseppe Nicoletti & Joaquim Oliveira Martins, 1991. "GREEN - - A Multi-Region Dynamic General Equilibrium Model for Quantifying the Costs of Curbing CO2 Emissions: A Technical Manual," OECD Economics Department Working Papers 104, OECD Publishing.
    2. John Pezzey, 1992. "Analysis of Unilateral CO, Control in the European Community and OECD," The Energy Journal, , vol. 13(3), pages 159-171, July.
    3. John Pezzey, 1992. "Analysis of Unilateral CO2 Control in the European Community and OECD," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 159-172.
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    Cited by:

    1. Michael Hoel, 2005. "The Triple Inefficiency of Uncoordinated Environmental Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 157-173, March.
    2. Golombek, Rolf & Brekke, Kjell Arne & Kittelsen, Sverre A.C., 2013. "Is electricity more important than natural gas? Partial liberalizations of the Western European energy markets," Economic Modelling, Elsevier, vol. 35(C), pages 99-111.
    3. Berg, Elin & Kverndokk, Snorre & Rosendahl, Knut Einar, 1998. "Gains from cartelisation in the oil market," Energy Policy, Elsevier, vol. 26(9), pages 725-727, August.
    4. Karishma Ansaram & Paolo Mazza, 2024. "Dependence Structure among Carbon Markets around the World: New Evidence from GARCH-Copula Analysis," The Energy Journal, , vol. 45(2), pages 237-260, March.
    5. Golombek, Rolf & Hagem, Cathrine & Hoel, Michael, 1995. "Efficient incomplete international climate agreements," Resource and Energy Economics, Elsevier, vol. 17(1), pages 25-46, May.
    6. Finn Roar Aune & Rolf Golombek & Sverre Kittelsen & Knut Einar Rosendahl, 2004. "Liberalizing the energy markets of Western Europe - a computable equilibrium model approach," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2137-2149.
    7. Jan Bråten & Rolf Golombek, 1998. "OPEC's Response to International Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 425-442, December.
    8. Kenichi Matsumoto & Toyoo Fukuda, 2006. "Analysis of the Effects of the Carbon Taxes Based on Imputed Prices of Carbon," EcoMod2006 272100061, EcoMod.
    9. GOLOMBEK Rolf & KITTELSEN Sverre, 2010. "Long-run Effects of Liberalising the Energy Markets in Western Europe," EcoMod2003 330700063, EcoMod.
    10. Golombek, Rolf & Hoel, Michael, 2004. "Unilateral emission reductions when there are cross -country technology spillovers," Memorandum 17/2004, Oslo University, Department of Economics.
    11. Ken’ichi Matsumoto & Toyoo Fukuda, 2006. "Environmental and economic analyses of the carbon tax based on the imputed price using applied general equilibrium model: taxation on the upper industrial sectors," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(1), pages 89-102, December.
    12. Ken’ichi Matsumoto & Toyoo Fukuda, 2006. "Environmental and economic analyses of the carbon tax based on the imputed price using applied general equilibrium model: taxation on the upper industrial sectors," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(1), pages 89-102, December.
    13. Lars Lindholt, 1999. "Beyond Kyoto: CO2 permit prices and the markets for fossil fuels," Discussion Papers 258, Statistics Norway, Research Department.
    14. Elin Berg & Snorre Kverndokk & Knut Einar Rosendahl, 1999. "Optimal Oil Exploration under Climate Treaties," Discussion Papers 245, Statistics Norway, Research Department.

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    JEL classification:

    • F0 - International Economics - - General

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