Climate change, fossil fuel prices and depletion: The rationale for a falling export tax

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dc.contributor.authorDay, Creina
dc.contributor.authorDay, Garth
dc.date.accessioned2017-04-04T00:26:12Z
dc.date.issued2017-06
dc.description.abstractThis paper examines how world prices affect depletion of exhaustible fossil fuels for export and the role of an export revenue tax in curbing depletion. Both effects are studied for a small open economy affected by climate change. We find that setting an export revenue tax rate to fall over time at the marginal social cost of depletion due to lower productivity from climate change encourages a resource exporter to leave an optimal stock in the ground – unextracted and unburnable. Growing prices during the past decade similarly curb depletion. Falling prices bring forward extraction. Because production is independent of consumption, the marginal social cost is independent of utility parameters which are difficult to estimate. Slowing fossil fuel extraction and the effective export of emissions is a contemporary challenge for climate policy. Our findings identify both why an export revenue tax should decline over time and an estimable target rate of decline to help meet this challenge amid changing world prices.en_AU
dc.format.mimetypeapplication/pdfen_AU
dc.identifier.issn0264-9993en_AU
dc.identifier.urihttp://hdl.handle.net/1885/114376
dc.publisherElsevieren_AU
dc.rights© 2017 Published by Elsevier B.V.en_AU
dc.sourceEconomic Modellingen_AU
dc.subjectResource depletionen_AU
dc.subjectSmall open economyen_AU
dc.subjectClimate changeen_AU
dc.titleClimate change, fossil fuel prices and depletion: The rationale for a falling export taxen_AU
dc.typeJournal articleen_AU
dcterms.accessRightsOpen Accessen_AU
local.bibliographicCitation.lastpage160en_AU
local.bibliographicCitation.startpage153en_AU
local.contributor.affiliationDay, C., Arndt-Corden Department of Economics, Crawford School of Public Policy, The Australian National Universityen_AU
local.contributor.affiliationDay, G., Research School of Economics, The Australian National Universityen_AU
local.contributor.authoremailcreina.day@anu.edu.auen_AU
local.contributor.authoremailgarth.day@anu.edu.auen_AU
local.contributor.authoruidu9804093en_AU
local.description.embargo2037-12-31
local.identifier.citationvolume63en_AU
local.identifier.doi10.1016/j.econmod.2017.01.006en_AU
local.identifier.uidSubmittedByu1005913en_AU
local.publisher.urlhttp://www.elsevier.com/en_AU
local.type.statusPublished Versionen_AU

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