Discussion Paper Details

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Title: On the Design of Global Refunding and Climate Change

Author(s): Hans Gersbach and Ralph Winkler

Publication Date: July 2007

Keyword(s): climate change mitigation, global refunding scheme, international agreements and self-enforcing mechanisms

Programme Area(s): Public Economics

Abstract: We design a global refunding scheme as a new international approach to address climate change. A global refunding system allows each country to set its carbon emission tax, while aggregate tax revenues are partially refunded to member countries in proportion to the relative emission reductions they achieve within a given period, compared to some given baseline emissions. In a simple model we show that a suitably designed global refunding scheme is self-enforcing and achieves the social global optimum.

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Bibliographic Reference

Gersbach, H and Winkler, R. 2007. 'On the Design of Global Refunding and Climate Change'. London, Centre for Economic Policy Research.