Replication data for: Steering the Climate System: Using Inertia to Lower the Cost of Policy
- Lemoine, Derek
- Rudik, Ivan
AbstractCommon views hold that the efficient way to limit warming to a chosen level is to price carbon emissions at a rate that increases exponentially. We show that this Hotelling tax on carbon emissions is actually inefficient. The least-cost policy path takes advantage of the climate system's inertia to delay reducing emissions and allow greater cumulative emissions. The efficient carbon tax follows an inverse-U-shaped path and grows more slowly than the Hotelling tax. Economic models that assume exponentially increasing carbon taxes are overestimating the cost of limiting warming, overestimating the efficient near-term carbon tax, and overvaluing technologies that mature sooner.
Is supplement to
DOI: 10.1257/aer.20150986 (Text)
Lemoine, Derek, and Ivan Rudik. “Steering the Climate System: Using Inertia to Lower the Cost of Policy.” American Economic Review 107, no. 10 (October 2017): 2947–57. https://doi.org/10.1257/aer.20150986.
- ID: 10.1257/aer.20150986 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-12