2013年-世界发展银行全球_Dynamic_Climate_Policy_with_Both_Strategic_and_Non-Strategic_Agents___Taxes_Versus_Quantities_34页_402kb

Summary of "Dynamic Climate Policy with Both Strategic and Non-Strategic Agents: Taxes Versus Quantities"

Core Content

This paper investigates the dynamics of climate policy in a global fossil fuel market involving two strategic blocs: a fossil fuel importer (I) and an exporter (E), and a non-strategic bloc (R), representing the rest of the world. The focus is on comparing the effectiveness of taxes and quotas as policy instruments in influencing trade and climate outcomes over time.

Main Viewpoints

• Taxes dominate quotas: Taxes are shown to be a dominant strategy for both the strategic importer and exporter, even in a dynamic setting. Quotas, on the other hand, can lead to zero trade in the Nash equilibrium when both strategic agents use them.
• Role of non-strategic agents: The presence of the non-strategic bloc R significantly alters the equilibrium outcomes. R is a passive agent with fixed trade policies, and its net demand for fossil fuels affects the shape of the supply and demand curves in the market.
• Welfare implications for R: The non-strategic bloc R benefits from tax-based policies of the strategic importer due to lower fossil fuel prices and reduced climate damages. The welfare effect of the strategic exporter’s policy on R is ambiguous, as higher prices may reduce R's imports but also slow GHG accumulation, which could be beneficial.
• Dynamic game and Markov Perfect Equilibrium: The paper analyzes the dynamic game using a Markov Perfect Equilibrium framework. The equilibrium policy levels depend on the current GHG stock, which evolves over time based on emissions and decay.

Key Information

Policy Instruments and Equilibrium Outcomes

• Taxes vs. Quotas: Taxes are always preferred by both strategic agents (importer and exporter) due to their ability to control trade and emissions more effectively.
• Equilibrium Trade: In a static game, quotas lead to zero trade when both agents use them. With R present, this outcome is altered, as the presence of R introduces a downwardly sloping demand curve, making quotas less effective in eliminating trade.
• Dynamic Policy Choices: The strategic importer and exporter both face dynamic problems, as their policy decisions depend on the current and future levels of GHG stock.

Role of R in the Game

• Passive but influential: R, as a net importer, is affected by the trade and climate policies of I and E. Its presence changes the incentive structure for strategic agents.
• Free rider effect: R benefits from the strategic importer's trade restrictions due to lower fossil fuel prices and reduced climate damages.
• Carbon leakage: The strategic exporter's policy may cause carbon leakage to R, as R shifts from imports to domestic production when prices rise.

Calibration and Model Assumptions

• Parameter Setup: The model is calibrated with specific values for demand and supply elasticities, production costs, and the discount factor.
• Baseline Calibration: With $\Lambda = 0.7$ (representing a high market share for I), and $\Gamma = 0.1667$ (representing a high share of world supply for E), the results suggest that climate-related damages are relatively small compared to terms of trade objectives.
• Sensitivity Analysis: The paper also explores the effects of varying $\Lambda$ and $\kappa$, showing that the qualitative results remain consistent even with different assumptions.

Policy Implications

• First-best vs. Equilibrium Outcomes: The social planner's optimal trajectory under a Pigouvian tax lies below the equilibrium trajectories in the four policy combinations, indicating that strategic agents' policies lead to higher emissions than socially optimal.
• Ambiguity in R's Welfare: The welfare effect on R from the strategic exporter's policy is ambiguous. While higher prices may reduce R's imports, they also reduce GHG accumulation, which could be beneficial in the long run.

Conclusion

The paper highlights that taxes are more effective than quotas in dynamic climate policy settings. The presence of non-strategic agents like R plays a crucial role in shaping the equilibrium outcomes, often leading to more favorable conditions for R under tax-based policies. These findings contribute to the understanding of how climate policy can be designed in the presence of both strategic and non-strategic actors in the global fossil fuel market.