Library & Tools

3006

View Report [PDF]

Adjusting Carbon Cost Analyses to Account for Prior Tax Distortions

Ian W.H. Parry

This technical paper discusses how carbon abatement policies interact with the tax system, and how these interactions affect the overall costs of carbon controls. The authors provide formulas for adjusting cost estimates of auctioned and grandfathered carbon emissions from partial equilibrium energy models into rough estimates of general equilibrium costs that account for fiscal interactions.

Please see our Reprint Guidelines for details on republishing our articles.