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Reconsidering Carbon Equivalence: Comparisons of GWP Time Horizon Choice Under a Global Carbon Tax

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  • Batistich, Mary Kate

Abstract

This study explores the importance of carbon equivalence metric choice in determining the distributional effects of a global carbon tax by comparing the enforcement of the same tax under two different metrics: the 100-year GWP, which is the current industry standard, and the 20-year GWP, which is a reasonable alternative. Under a computable general equilibrium framework, simulations of a $27/tCO2e uniform, global tax indicate that many regions are made worse off by the 20-year GWP, generally because the metric more than doubles the importance of methane emissions. Regions with relatively low emissions intensities, particularly in methane-reliant sectors, benefit from the 20-year GWP. There are greater emissions reductions in both methane gas and nitrous oxide under the 20-year GWP.

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  • Batistich, Mary Kate, 2016. "Reconsidering Carbon Equivalence: Comparisons of GWP Time Horizon Choice Under a Global Carbon Tax," Conference papers 332786, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332786
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