Do you know of any studies that try to quantify the elasticity of co2 emissions? In particular, I’m interested in how much co2 emissions would be reduced by a carbon tax. And I would imagine that past changes in prices caused by factors other than taxes can help us estimate this.
The reason this seems important to me is that the only reliable effect of a Pigouvian tax is its effect on consumption. We can hope that the government will then use the money they collect in order to correct the externalities. But I think that’s all we have on that front: hope. This seems even more true when the timeline spans many generations, many governmental administrations, and many crises that inspire profligate spending. How wrong am I on this front? Do you think there is a way to ensure that taxes collected today will be used as intended in a hundred years? Fifty years? Twenty five years?
Do you know of any studies that try to quantify the elasticity of co2 emissions? In particular, I’m interested in how much co2 emissions would be reduced by a carbon tax. And I would imagine that past changes in prices caused by factors other than taxes can help us estimate this.
The reason this seems important to me is that the only reliable effect of a Pigouvian tax is its effect on consumption. We can hope that the government will then use the money they collect in order to correct the externalities. But I think that’s all we have on that front: hope. This seems even more true when the timeline spans many generations, many governmental administrations, and many crises that inspire profligate spending. How wrong am I on this front? Do you think there is a way to ensure that taxes collected today will be used as intended in a hundred years? Fifty years? Twenty five years?