Social time preference and the optimal carbon price

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Title Social time preference and the optimal carbon price
Author Guest, Ross
Journal Name Applied Economics Letters
Year Published 2011
Place of publication United Kingdom
Publisher Routledge
Abstract This article examines the implications of alternative social time preference assumptions for the optimal carbon price by numerical simulations of a simple Ramsey model. Three specifications of social time preferences are compared: a constant social time preference rate (stpr), decreasing social impatience or hyperbolic social preferences and increasing social impatience. The results show nontrivial effects on the optimal carbon price. The policy implication is that value judgements about intergenerational welfare, reflected in stpr, have implications for policies aimed at achieving a target carbon price. These value judgements therefore ought to be made explicit in setting target carbon prices over time.
Peer Reviewed Yes
Published Yes
Alternative URI http://dx.doi.org/10.1080/13504851.2010.528352
Volume 18
Issue Number 12
Page from 1163
Page to 1166
ISSN 1350-4851
Date Accessioned 2012-03-12; 2012-03-21T23:17:58Z
Date Available 2012-03-21T23:17:58Z
Research Centre Griffith Asia Institute
Faculty Griffith Business School
Subject Applied Economics
URI http://hdl.handle.net/10072/43774
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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