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Licensed Unlicensed Requires Authentication Published by De Gruyter February 1, 2022

Citizen Carbon Fund: Harmonized International Carbon Taxes and Transfers to Increase Treaty Size

Anna A. Klis ORCID logo and Matthew McGinty

Abstract

A uniform carbon tax and Citizen Carbon Fund are proposed as a zero-sum system of transfers that can increase equilibrium participation and result in a positive carbon check for each citizen covered by the agreement. The carbon tax results in efficient abatement, generates tax revenue and finances transfers that increase equilibrium participation in a climate agreement. A single carbon price is easier to negotiate than many different abatement requirements, but mirrors the results of a cap-and-trade agreement. An example using the four largest carbon emitters illustrates the set of stable agreements, the transfers required for stability and the resulting carbon checks.

JEL Classification: C7; D7; F5; H4

Corresponding author: Matthew McGinty, Department of Economics, University of Wisconsin-Milwaukee, 3210 N. Maryland Ave., Bolton Hall 888, Milwaukee, WI 53211, USA, E-mail:

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Received: 2021-02-26
Accepted: 2021-12-21
Published Online: 2022-02-01

© 2022 Walter de Gruyter GmbH, Berlin/Boston

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