Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Thematic Session: Climate policy and international financial markets (Streaming) Location: B009 Session Chair: Armon Rezai, Vienna University of Economics and Business Session Chair: Rick van der Ploeg, University of Oxford | |
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How to get current generations to support an emissions cap: Climate policy in creditor and debtor economies 1: Vienna University of Economics and Business; 2: University of Oxford A small open economy model with overlapping generations, endogenous labour supply, government debt, and current account dynamics is used to analyse the effects of unilateral climate policy on welfare and macroeconomic and distributional outcomes. We contrast implementation of the cap on cumulative emissions via a constant carbon price with an efficient Hotelling rule for the carbon price. In both cases, a delayed policy requires higher carbon taxes to meet the target. A creditor country draws down international assets to buffet the cost of climate policy, while a debtor economy, requiring higher carbon taxes, faces negative wealth effects from the policy. By appropriately issuing public debt, the government can ensure that a majority of those alive supports the emissions-reductions policy, albeit at the expense of future generations. In all cases, the effects on employment, capital flight, and the current account are highlighted. | |