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Carbon pricing under binding political constraints

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  • Jesse D. Jenkins
  • Valerie J. Karplus

Abstract

The economic prescription for climate change is clear: price carbon dioxide (CO 2 ) and other greenhouse gas emissions to internalize climate damages. In practice, a variety of political economy constraints prevent the introduction of a carbon price equal to the full social cost of emissions. This paper develops insights about the design of climate policy in the face of binding political constraints, formulated here as limits on the CO 2 price itself, on increases in energy prices, and on energy consumer and producer surplus loss.

Suggested Citation

  • Jesse D. Jenkins & Valerie J. Karplus, 2016. "Carbon pricing under binding political constraints," WIDER Working Paper Series wp-2016-44, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2016-44
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2016-44.pdf
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    References listed on IDEAS

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    Cited by:

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    3. Adam Michael Bauer & Cristian Proistosescu & Gernot Wagner, 2023. "Carbon Dioxide as a Risky Asset," CESifo Working Paper Series 10278, CESifo.
    4. Sinha, Avik & Shah, Muhammad Ibrahim & Mehta, Atul & Sharma, Rajesh, 2022. "Impact of Energy Innovation on Greenhouse Gas Emissions: Moderation of Regional Integration and Social Inequality in Asian Economies," ADBI Working Papers 1304, Asian Development Bank Institute.
    5. Verde, Stefano F. & Di Cosmo, Valeria, 2024. "A dynamic carbon tax on gasoline," MPRA Paper 120485, University Library of Munich, Germany.
    6. Arun Singh & Niven Winchester & Valerie J. Karplus, 2019. "Evaluating India’S Climate Targets: The Implications Of Economy-Wide And Sector-Specific Policies," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 1-29, August.

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