The Russian Presidential Academy
of National Economy
and Public Administration
82 Vernadskogo prosp 117517
Moscow Russian Federation
Institutional Affiliations: Russian Presidential Academy of National Economy and Public Administr and The Gaidar Institute for Economic Policy
Information about this author at RePEc
NBER Working Papers and Publications
|April 2020||Pareto-Improving Carbon-Risk Taxation|
with Laurence J. Kotlikoff, Felix Kubler, Simon Scheidegger: w26919
Anthropogenic climate change produces two conceptually distinct negative economic externalities. The first is an expected path of climate damage. The second, which is this paper's focus, is an expected path of economic risk. To isolate the climate-risk problem, we consider mean-zero, symmetric shocks in our 12-period, overlapping generations model. These shocks impact dirty energy usage (carbon emissions), the relationship between carbon concentration and temperature, and the connection between temperature and damages. Our model exhibits a de minimis climate problem absent its shocks. But due to non-linearities, symmetric shocks deliver negatively skewed impacts, including the potential for climate disasters. As we show, Pareto-improving carbon taxation can dramatically lower climate risk,...
|April 2019||Making Carbon Taxation a Generational Win Win|
with Laurence J. Kotlikoff, Felix Kubler, Jeffrey D. Sachs, Simon Scheidegger: w25760
Carbon taxation has been studied primarily in social planner or infinitely lived agent models, which trade off the welfare of future and current generations. Such frameworks obscure the potential for carbon taxation to produce a generational win-win. This paper develops a large-scale, dynamic 55-period, OLG model to calculate the carbon tax policy delivering the highest uniform welfare gain to all generations. The OLG framework, with its selfish generations, seems far more natural for studying climate damage. Our model features coal, oil, and gas, each extracted subject to increasing costs, a clean energy sector, technical and demographic change, and Nordhaus (2017)’s temperature/damage functions. Our model’s optimal uniform welfare increasing (UWI) carbon tax starts at $30 tax, rises annu...
|October 2016||Will the Paris Accord Accelerate Climate Change?|
with Laurence J. Kotlikoff, Andrey Zubarev: w22731
The 2015 Paris Accord is meant to control our planet’s rising temperature. But it may be doing the opposite in gradually, rather than immediately reducing CO2 emissions. The Accord effectively tells dirty-energy producers to "use it or lose it." This may be accelerating their extraction and burning of fossil fuels and, thereby, be permanently raising temperatures.
Our paper uses a simple OLG model to illustrate this long-noted Green Paradox. Its framework treats climate damage as a negative externality imposed by today’s generations on tomorrow’s – an externality that is, in part, irreversible and can tip the climate to permanently higher temperatures. In our model, delaying abatement can lead to larger changes in climate than doing nothing, reducing welfare for all generations. In contra...