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Type | Working Paper |
Scope | Discipline-based scholarship |
Title | Optimal carbon tax for maritime shipping? Environmental policy meets network economics |
Organization Unit | |
Authors |
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Language |
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Institution | University of Zurich |
Series Name | Kühne Center Impact Series |
Number | 05-23 |
Number of Pages | 15 |
Date | 2023 |
Abstract Text | The world trading system is a very complicated network comprised of shipping routes that link many connecting ports or nodes. In such a networked setting, the economics of regulation is challenging because the efficiency of a networked system depends on both the set of active nodes (ports) and the volume of activity flowing through its links (trade). In this Kühne Impact Series, I discuss how a standard environmental policy such as taxing carbon emissions may have the unintended consequence of lowering overall network efficiency. As a result environmental policies need to be designed carefully whenever network interaction effects are large. When they are large and positive, as seems to be the case, then the optimal carbon tax is below the marginal social cost of carbon. |
Official URL | https://www.kuehnecenter.uzh.ch/impact_series/2023_12_22-optimal_carbon_tax.html |
Other Identification Number | merlin-id:24394 |
PDF File | Download from ZORA |
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