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Climate Policy In Crisis And Recovery

Author

Listed:
  • BENJAMIN JONES

    (Formerly Fiscal Affairs Department, International Monetary Fund, Washington DC 20431, USA)

  • MICHAEL KEEN

    (Fiscal Affairs Department, International Monetary Fund, Washington DC 20431, USA)

Abstract

This paper focuses on the implications of the economic crisis and recession of 2008–2009 for climate change and related policy responses. Stressing that even prolonged output losses make very little difference to appropriate emissions reduction objectives, the paper argues that a cautious shift towards a more aggressive path of carbon pricing need not impede recovery and could make a valuable contribution to addressing looming fiscal challenges. Well-designed and monitored "green" stimulus measures can help sustain aggregate demand during the downturn, while increased climate-related public spending will likely be needed into the longer-term. However, it is critical to avoid undue reliance on spending rather than tax measures, particularly as the recovery strengthens.

Suggested Citation

  • Benjamin Jones & Michael Keen, 2011. "Climate Policy In Crisis And Recovery," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 103-119.
    • Handle: RePEc:wsi:jicepx:v:02:y:2011:i:01:n:s1793993311000245
    DOI: 10.1142/S1793993311000245
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    References listed on IDEAS

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    1. Eduardo, Ley & Jessica, Boccardo, 2009. "The Taxation of Motor Fuel: International Comparison," MPRA Paper 19461, University Library of Munich, Germany.
    2. Don Fullerton & Holly Monti, 2010. "Can Pollution Tax Rebates Protect Low-Income Families? The Effects of Relative Wage Rates," NBER Working Papers 15935, National Bureau of Economic Research, Inc.
    3. Michael Keen & Benjamin Jones, 2009. "Climate Policy and the Recovery," IMF Staff Position Notes 2009/28, International Monetary Fund.
    4. World Bank, 2010. "World Development Report 2010," World Bank Publications - Books, The World Bank Group, number 4387.
    5. Nicholas Stern, 2008. "The Economics of Climate Change," American Economic Review, American Economic Association, vol. 98(2), pages 1-37, May.
    6. Mr. Michael Keen & Benjamin Jones, 2009. "Climate Policy and the Recovery," IMF Staff Position Notes 2009/028, International Monetary Fund.
    7. Knittel, Christopher R, 2009. "The Implied Cost of Carbon Dioxide under the Cash for Clunkers," Institute of Transportation Studies, Working Paper Series qt95b1c3t0, Institute of Transportation Studies, UC Davis.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(1), pages 29-70, February.

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    More about this item

    Keywords

    Climate change; fiscal policy; carbon taxation; emissions trading; fiscal stimulus; Q43; Q50; H23; E62;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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