Climate policy

Hassler, J., Krusell, P. & Nycander, J. (2016). Climate policy. Economic Policy, 31(87), 503 - 558. https://doi.org/10.1093/epolic/eiw007
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This paper makes suggestions for climate policy and defends them based on recent research in economics and the natural sciences. In summary: (i) the optimal carbon tax is rather modest; (ii) the key climate threat is coal; (iii) a carbon tax is to be preferred over a quantity-based system; (iv) the optimal tax on carbon does not appreciably harm growth; (v) subsidies to green technology are beneficial for the climate only to the extent that they make green technology outcompete coal; and (vi) a carbon tax is politically feasible.

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