Global unanimity agreement on the Carbon Budget

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• dc.contributor.author Llavador, Humberto
• dc.contributor.author Roemer, John E.
• dc.contributor.author Stoerk, Thomas
• dc.date.accessioned 2025-01-21T15:27:53Z
• dc.date.available 2025-01-21T15:27:53Z
• dc.date.issued 2022
• dc.description.abstract This paper analyzes a stylized model of the global economy in which countries must agree on the carbon budget while the decision on the level of carbon emissions is decentralized, with firms treating their emissions as a production input for which a uniform price is charged. The revenue accumulates in a global fund and is returned to global citizens according to national shares that are announced ex ante. The vector of country shares for the distribution of the carbon revenue assures that countries agree by unanimity on the carbon budget. The equilibrium exhibits the following desired features: (1) the global emissions level is set by unanimous agreement; (2) the demand to emit carbon is decentralized and, hence, there is no need to determine the distribution of permits; and (3) the equilibrium is Pareto efficient. We explore the implication of the model in an application based on RICE-2010.
• dc.description.sponsorship Humberto Llavador acknowledges financial support from the Spanish Agencia Estatal de Investigación (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-000915-S) and grants AEI/FEDER, UE-PGC2018-096370-B-I00 and PID2020-115044GB-I00//AEI/10.13039/501100011033.
• dc.format.mimetype application/pdf
• dc.identifier.citation Llavador H, Roemer J, Stoerk T. Global unanimity agreement on the Carbon Budget. Cuadernos económicos de ICE. 2022;(104):9-29. DOI: 10.32796/cice.2022.104.7491
• dc.identifier.doi http://dx.doi.org/10.32796/cice.2022.104.7491
• dc.identifier.issn 0210-2633
• dc.identifier.uri http://hdl.handle.net/10230/69226
• dc.language.iso eng
• dc.publisher Ministerio de Economía, Comercio y Empresa. Secretaría de Estado de Comercio
• dc.relation.ispartof Cuadernos económicos de ICE. 2022;(104):9-29
• dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/CEX2019-000915-S
• dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/PID2020-115044GB-I00
• dc.rights Cuadernos Económicos de ICE se distribuyen bajo una licencia de uso y distribución Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0 Internacional (https://creativecommons.org/licenses/by-nc-sa/4.0/).
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-sa/4.0/
• dc.subject.keyword International environmental agreement
• dc.subject.keyword Climate economics
• dc.subject.keyword Climate policy
• dc.subject.keyword Carbon price
• dc.title Global unanimity agreement on the Carbon Budget
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion