Who should abate carbon emissions? Optimal climate policy when national preferences determine its implementation
Abstract (co-authors: Ottmar Edenhofer & David Klenert):
This presentation studies the effect of a previously neglected information asymmetry on the social cost of carbon (SCC). In the standard approach for determining the SCC, a super-national governance level internalizes climate damages leading to globally efficient emission reductions. Countries are usually modeled as a representative agent. We argue that this approach neglects a central determinant of the SCC: national governments that redistribute between heterogeneous households. We account for this additional level of governance. This leads to an information asymmetry between global and national levels of governance concerning the distribution between heterogeneous households. We show analytically how the SCC depends on national redistribution. Furthermore, we use numerical methods to estimate the scope of these effects over a range of parameter values.
Dr. Ulrike Kornek's research interests are in environmental economics with a focus on international climate policy. She uses analytical and numerical models to study the interaction of various actors with differing interests. At the center of her research are applied game-theoretical models that describe the consquences of different policy instrument and institutions on the mitigation of greenhouse gas emissions. In addition, she analyzes the effect of market-based environmental regulation in the context of the European emission trading scheme.
Ulrike Kornek studied physics at the university of Magdeburg and worked as a PhD student at the Potsdam- Institute for Climate Impact Research. Her work at MCC started after finishing her PhD in environmental economics at the Technische Universität Berlin in 2015.