Carbon tax and OPEC's rents under a ceiling constraint

Rémy Dullieux (1) , Lionel Ragot (2) , Katheline Schubert (1, 3)

1 CES - Centre d'économie de la Sorbonne
2 EPEE - Centre d'Etudes des Politiques Economiques
3 PSE - Paris School of Economics

We study the Markov-perfect Nash equilibrium (MPNE) of a game between oil-importing countries, who seek to maintain the atmospheric carbon concentration under a given ceiling, and oil-exporting countries. The oil-importing countries set a carbon tax and the oil-exporting countries control the producer price. We obtain implicit feedback rules and explicit non-linear time paths of extraction, carbon tax, and producer price. Consumers are always able to reap some share of the scarcity and monopoly rents, whereas producers partially pre-empt the carbon tax only if the marginal damage under the ceiling is small. We compare the MPNE to the efficient, open-loop, and cartel-without-tax equilibria.

Mots clés: Global warming; differential games; non-linear strategies; non-renewable resources

Domaines: Economies et finances

Rémy Dullieux, Lionel Ragot, Katheline Schubert. Carbon tax and OPEC's rents under a ceiling constraint. Scandinavian Journal of Economics, 2011, 113 (4), pp.798-824. ⟨10.1111/j.1467-9442.2011.01678.x⟩. ⟨halshs-00976591⟩