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The Possibilities For Global Poverty Reduction Using Revenues From Global Carbon Pricing

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  • James B. Davies
  • Xiaojun Shi
  • John Whalley

Abstract

Global carbon pricing can yield revenues which are large enough to create significant global pro-poor redistributive opportunities. We analyze alternative multidecade growth trajectories for major global economies with carbon tax rates designed to stabilize emissions in the presence of both continued country growth and autonomous energy use efficiency improvement. In our central case analysis, revenues from globally internalizing carbon pricing rise to 7% and then fall to 5% of gross world product. High growth in India and China is the major equalizing force globally over time, but the incremental redistributive effects that can be achieved using global carbon pricing revenues are large both in absolute and relative terms. Revenues from carbon pricing depend on growth and energy efficiency improvement parameters as well as on the price elasticity of demand for fossil fuels.

Suggested Citation

  • James B. Davies & Xiaojun Shi & John Whalley, 2011. "The Possibilities For Global Poverty Reduction Using Revenues From Global Carbon Pricing," NBER Working Papers 16878, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16878
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    1. Xavier Sala-i-Martin, 2001. "The disturbing 'rise' of global income inequality," Economics Working Papers 616, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2002.
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    1. Pradhan, Basanta K. & Ghosh, Joydeep, 2019. "Climate policy vs. agricultural productivity shocks in a dynamic computable general equilibrium (CGE) modeling framework: The case of a developing economy," Economic Modelling, Elsevier, vol. 77(C), pages 55-69.

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    More about this item

    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • 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

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