- , where wt is the wage. Normalizing labor supply to unity, the wage if no labor is used for coal extraction is wt = (1 â Î â Î) Yt.5 The ïve-year average of coal prices between 2005 and 2009 is $74/ton.6 Under the assumption that taxes currently are negligible and that the coal market is competitive, the price reïects the marginal carbon extraction cost. Using the yearly world (PPP-adjusted) GDP of 75 trillion US$ and a period length of a decade, we obtain Ac 0 by dividing (1 â Î â Î) Yt by the carbon extraction cost per Gigaton as Ac t = (1 â 0.3 â 0.03) 750 1012 74 109 = 6791/GtC. Thus, a share 1 6791 of a decadeâs labor supply is required for each Gt of coal extracted.
Paper not yet in RePEc: Add citation now
- 6This refers to U.S. Central Appalachian coal; source BP (2010). The 10-year average from 2000-2009 is 58.8 dollars per ton.
Paper not yet in RePEc: Add citation now
- Acemoglu, Daron (2009), Introduction to Modern Economic Growth, Princeton University Press, Princeton, New Jersey.
Paper not yet in RePEc: Add citation now
Acemoglu, Daron, Philippe Aghion, Leonardo Bursztyn, and David Hemous (2010), âThe Environment and Directed Technical Changeâ, American Economic Review, forthcoming.
- Angeletos, Marios (2007), âUninsured Idiosyncratic Investment Risk and Aggregate Savingâ, Review of Economic Dynamics, 10:1.
Paper not yet in RePEc: Add citation now
Angeletos, Marios and Laurent Calvet (2006), âIdiosyncratic Production Risk, Growth and the Business Cycleâ, Journal of Monetary Economics, 53:6.
- Archer, David (2005), âThe Fate of Fossil Fuel CO2 in Geologic Timeâ, Journal of Geophysical Research, 110(C9).
Paper not yet in RePEc: Add citation now
- Archer, David et al. (2009), âAtmospheric Lifetime of Fossil Fuel Carbon Dioxideâ, Annual Review of Earth and Planetary Sciences, 37.
Paper not yet in RePEc: Add citation now
Bovenberg and Smulders (1996), âTransitional Impacts of Environmental Policy in an Endogenous Growth Modelâ, International Economic Review, 37:4.
Bovenberg, Lans and Sjak Smulders (1995), âEnvironmental Quality and Pollution-Augmenting Technological Change in a Two-Sector Endogenous Growth Modelâ, Journal of Public Economics, 57.
- BP (2010), BP Statistical Review of World Energy, June, http://bp.com/statisticalreview.
Paper not yet in RePEc: Add citation now
Chakravorty, Ujjayant, James Roumasset, and Kinping Tse (1997), âEndogenous Substitution among Energy Resources and Global Warmingâ, Journal of Political Economy, 105:6.
- Clarke, Leon et al. (2009), âInternational Climate Policy Architectures: Overview of the EMF 22 International Scenarios, Energy Economics, 31.
Paper not yet in RePEc: Add citation now
Covas, Francesco (2006), âUninsured Idiosyncratic Production Risk with Borrowing Constraints , Journal of Economic Dynamics and Control, 30:11 Dasgupta, Partha and Georey Heal (1974), âThe Optimal Depletion of Exhaustable Resources , Review of Economic Studies, 41.
Eyckmans, Johan and Henry Tulkens (2003), âSimulating Coalitionally Stable Burden Sharing Agreements for the Climate Change Problemâ, Resource and Energy Economics, 25.
- Gars, Johan, Michael Golosov and Aleh Tsyvinski (2009), âCarbon Taxing and Alternative Energy, mimeo, Yale University.
Paper not yet in RePEc: Add citation now
Goulder, Lawrence and Koshy Mathai (2000), âOptimal CO2 Abatement in the Presence of Induced Technological Change, Journal of Environmental Economics and Management, 39.
Grimaud AndrÃ, Gilles Laorgue, and Bertrand Magnà (2011), âClimate Change Mitigation Options and Directed technical Change: A Decentralized Equilibrium Analysis, Resource and Energy Economics, 33:4.
- Hartley, Peter, Kenneth Medlock, Ted Temzelides, and Xinya Zhang (2011), âEnergy Sector Innovation and Growth: An Optimal Energy Crisisâ, mimeo, Rice University.
Paper not yet in RePEc: Add citation now
Hassler, John, Per Krusell, and Conny Olovsson (2011), âEnergy Saving Technical Change, mimeo, Institute of International Economic Studies, Stockholm University.
- Hoel, Michael (2009), âClimate change and carbon tax expectations, CESifo Working Paper Series 2966.
Paper not yet in RePEc: Add citation now
Hotelling, Harald (1931), âThe Economics of Exhaustible Resources, Journal of Political Economy, 39:2.
- IPCC (Intergovernmental Panel on Climate Change) (2007), âClimate Change 2007: The Physical Science Basisâ, Eds. Bert Metz, Ogunlade Davidson, Peter Bosch, Rutu Dave, and Leo Meyer. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.
Paper not yet in RePEc: Add citation now
- Jones, Charles (2002), Introduction to Economic Growth, W. W. Norton.
Paper not yet in RePEc: Add citation now
- Jorgenson, Dale, Richard Goettle, Mun Ho, and Peter Wilcoxen (2008), âThe Economic Costs of a Market-Based Climate Policy, White Paper, Pew Center on Global Climate Change.
Paper not yet in RePEc: Add citation now
Kelly, David and Charles Kolstad (1999), âBayesian Learning, Growth, and Pollutionâ, Journal of Economic Dynamics and Control, 23:4.
Krusell, Per and Anthony Smith (1998), âIncome and Wealth Heterogeneity in the Macroeconomy â, Journal of Political Economy, 106.
Krusell, Per and Anthony Smith (2006), âQuantitative Macroeconomic Models with Heterogeneous Agentsâ, Eds Richard Blundell, Whitney Newey, and Torsten Persson, Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Econometric Society Monographs, 41, Cambridge University Press.
- Krusell, Per and Anthony Smith (2009), âMacroeconomics and Global Climate Change: Transition for a Many-Region Economyâ, working paper.
Paper not yet in RePEc: Add citation now
Leach, Andrew (2007), âThe Welfare Implications of Climate Change Policyâ, Journal of Economic Dynamics and Control, 57.
- McKibbin, Warwick and Peter Wilcoxen (1999), âThe Theoretical and Empirical Structure of the G-Cubed model, Economic Modelling, 16:1.
Paper not yet in RePEc: Add citation now
- Mendelsohn, Robert, William Nordhaus, and Dai Gee Shaw (1994), âThe Impact of Global Warming on Agriculture: A Ricardian Approachâ, American Economic Review, 84:4.
Paper not yet in RePEc: Add citation now
- Nordhaus, William (2007), âTo Tax or Not to Tax: The Case for a Carbon Taxâ, Review of Environmental Economics and Policy.
Paper not yet in RePEc: Add citation now
- Nordhaus, William (2008), A Question of Balance: Weighing the Options on Global Warming Policies, Yale University Press, New Haven, CT.
Paper not yet in RePEc: Add citation now
- Nordhaus, William and Joseph Boyer (2000), Warming the World: Economic Modeling of Global Warming, MIT Press, Cambridge, MA.
Paper not yet in RePEc: Add citation now
- Perman, Roger et al. (2003), Natural Resource and Environmental Economics, Chapter 16, Pearson Higher Education.
Paper not yet in RePEc: Add citation now
Pizer, William (1998), âThe Optimal Choice of Climate Change Policy in the Presence of Uncertaintyâ, Resource and Energy Economics, 21.
- Revelle, Roger and Hans Suess (1957), âCarbon Dioxide Exchange between Atmosphere and Ocean and the Question of an Increase of Atmospheric CO2 during Past Decadesâ, Tellus, 9. Roe, Gerard and Marcia Baker (2007), âWhy Is Climate Sensitivity So Unpredictable?â, Science.
Paper not yet in RePEc: Add citation now
- Roe, Gerard and Yoram Bauman (2011), âShould the Climate Tail Wag the Policy Dog?â, mimeo, University of Washington, Seattle.
Paper not yet in RePEc: Add citation now
- Rogner, Hans-Holger (1997), âAn Assessment of World Hydrocarbon Resources, Annual Review of Energy and the Environment, 22.
Paper not yet in RePEc: Add citation now
Saint-Paul, Gilles (2002), âEnvironmental Policy and Directed Innovation in a Schumpeterian Growth Modelâ, working paper.
- Saint-Paul, Gilles (2007), âQuels instruments pour une politique environnementale?â, working paper.
Paper not yet in RePEc: Add citation now
- See also Saint-Paul (2002,2007); in the latter paper it is argued that optimal subsidies should be higher for environmental innovation even if Pigou tax on emissions is used.
Paper not yet in RePEc: Add citation now
Sinclair, Peter (1992), âHigh Does Nothing and Raising is Worse: Carbon Taxes Should Be Kept Declining to Cut Harmful Emissions, Manchester School, 60.
Sinclair, Peter (1994), âOn the Optimal Trend of Fossil-Fuel Taxationâ, Oxford Economic Papers, 46.
Sinn, Hans-Werner (2008), âPublic Policies against Global Warming: A Supply Side Approach , International Tax and Public Finance, 15:4.
Solow, Robert (1974), âIntergenerational Equity and Exhaustible Resourcesâ, Review of Economic Studies, 41.
Stern, Nicholas (2007), The Economics of Climate Change: The Stern Review, Cambridge University Press, Cambridge, UK.
Sterner, Tomas and Martin Persson (2008), âAn Even Sterner Review: Introducing Relative Prices into the Discounting Debateâ, Review Environmental Economics and Policy, 2:1.
Stiglitz, Joseph (1974), âGrowth with Exhaustible Natural Resources: E cient and Optimal Growth Pathsâ, Review of Economic Studies, 41.
- Swedish Tax Agency (2010), âSkatter i Sverige âSkattestatistisk Ãrsbok 2010â(in Swedish), http://www.skatteverket.se.
Paper not yet in RePEc: Add citation now
Tol, Richard (2008), âThe Social Cost of Carbon: Trends, Outliers and Catastrophesâ, Economics: The Open-Access, Open-Assessment E-Journal, 2, http://dx.doi.org/10.5018/economics-ejournal.ja.2008-25.
Uzawa (2003), Economic Theory and Global Warming, Cambridge University Press.
Van der Ploeg, Frederick and Cees Withagen (2010), âIs There Really a Green Paradox?â, CESifo Working Paper Series 2963.
Weitzman, Martin (2009), âOn Modeling and Interpreting the Economics of Catastrophic Climate Changeâ, Review of Economics and Statistics, 91.
- Weyant, John et al. (1996), âIntegrated Assessment of Climate Change: An Overview and Comparison of Approaches and Results, in Eds. Bruce, J., Lee, H.P., Haites, E.F. Eds.., Climate Change 1995. Economic and Social Dimensions of Climate Change: Contribution of Working Group II to the Second Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press, Cambridge.
Paper not yet in RePEc: Add citation now