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Weighing cows, geoengineering and coal under a climate tipping risk and a temperature target

Author

Listed:
  • Anthony Wiskich

Abstract

Methane abatement and geoengineering have a short-lived effect on temperature compared with carbon abatement. Different optimal tax paths for these actions arise in a cost-benefit framework with an unknown temperature threshold where severe and irreversible climate impacts, called a tipping point, occurs. Tax paths are compared with a cost-minimising approach where an upper-temperature limit is set. In both approaches, the weight (ratio) of prices of short-lived gases to carbon prices converge to the same value by the end of the peak temperature stabilisation period. Numerical results from the cost-benefit framework suggest: the optimal weight for methane is close to the current United Nations policy of a 100-year Global Warming Potential, and the 100-year timeframe should decrease to align with the expected end of peak temperature. The use of geoengineering can lower the initial carbon tax and extend the life of the tax

Suggested Citation

  • Anthony Wiskich, 2019. "Weighing cows, geoengineering and coal under a climate tipping risk and a temperature target," CAMA Working Papers 2019-65, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2019-65
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2019-12/65_2019_wiskich.pdf
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    More about this item

    Keywords

    Climate change; tipping points; optimal policy; optimal taxes; global warming potential; geoengineering.;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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