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A Pay-For-Cuts Carbon Treaty

Author

Listed:
  • LAURENCE SEIDMAN

    (Department of Economics, University of Delaware, Newark, DE 19716, USA)

  • XIN YAN

    (Department of Economics, University of Delaware, Newark, DE 19716, USA)

Abstract

This paper describes and analyzes a proposal for a pay-for-cuts carbon treaty and illustrates how it would work with numerical simulations for 186 countries. A treaty board would pay each country’s government an amount P for each CO2 ton the country cuts by any method. Each government would decide how to get its firms and households to cut CO2 emissions; the board would encourage a carbon tax or cap-and-trade but not require it. Ri is the number of tons that country i reduces its CO2 emissions. Ri equals country i’s base emissions minus its actual emissions which are publicly available data. Country i’s government would receive PRi from the board. The board’s PRi payments would be financed by country government contributions to the board. A formula would give each country’s government the amount it must contribute each year. The formula would aim to make government contributions equal to the board’s PRi payments and equitably distribute the burdens from cutting world emissions. Representatives of the countries would have to approve the board’s most important decisions.

Suggested Citation

  • Laurence Seidman & Xin Yan, 2024. "A Pay-For-Cuts Carbon Treaty," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-19, February.
    • Handle: RePEc:wsi:ccexxx:v:15:y:2024:i:01:n:s2010007823500306
    DOI: 10.1142/S2010007823500306
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