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

  title={Why Finance Ministers Favor Carbon Taxes, Even If They Do Not Take Climate Change into Account},
  author={Max Franks and O. Edenhofer and Kai Lessmann},
  journal={Environmental and Resource Economics},
  • Max Franks, O. Edenhofer, Kai Lessmann
  • Published 2015
  • Economics
  • Environmental and Resource Economics
  • 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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