American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
ACE—Analytic Climate Economy
American Economic Journal: Economic Policy
vol. 15,
no. 3, August 2023
(pp. 372–406)
Abstract
I study optimal carbon taxation in an analytic quantitative integrated assessment model (IAM) that links IAM components, parametric assumptions, and calibration approaches directly to their policy impacts. I show how temperature's tax impact differs from that of previously analytically modeled carbon dynamics. Novel to analytic IAMs are a general economy, energy sectors including capital, varying degrees of substitutability across energy sources, an approximation of capital persistence, objective functions that include CES preferences and population weighting, and an explicit model of the greenhouse effect and ocean-atmosphere temperature dynamics. The paper enables economists to develop better-informed opinions about the social cost of carbon.Citation
Traeger, Christian P. 2023. "ACE—Analytic Climate Economy." American Economic Journal: Economic Policy, 15 (3): 372–406. DOI: 10.1257/pol.20210297Additional Materials
JEL Classification
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H43 Project Evaluation; Social Discount Rate
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q58 Environmental Economics: Government Policy
There are no comments for this article.
Login to Comment