Why Finance Ministers Favor Carbon Taxes, Even If They Do Not Take Climate Change into Account

@article{Franks2017WhyFM,
  title={Why Finance Ministers Favor Carbon Taxes, Even If They Do Not Take Climate Change into Account},
  author={Max Franks and Ottmar Edenhofer and Kai Lessmann},
  journal={Environmental and Resource Economics},
  year={2017},
  volume={68},
  pages={445-472}
}
Fiscal considerations may shift governmental priorities away from environmental concerns: finance ministers face strong demand for public expenditures such as infrastructure investments but they are constrained by international tax competition. We develop a multi-region model of tax competition and resource extraction to assess the fiscal incentive of imposing a tax on carbon rather than on capital. We explicitly model international capital and resource markets, as well as intertemporal capital… CONTINUE READING
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