Voting on Prices vs. Voting on Quantities in a World Climate Assembly

Citation:

Weitzman ML. Voting on Prices vs. Voting on Quantities in a World Climate Assembly. Research in Economics [Internet]. 2017;71 (2) :199-211.
Pre-publication version270 KB

Abstract:

This paper posits the conceptually useful allegory of a futuristic “World Climate Assembly” that votes on global carbon emissions via the basic principle of majority rule. Two variants are considered. One is to vote on a universal price (or tax) that is internationally harmonized, but the proceeds from which are domestically retained. The other is to vote on the overall quantity of total worldwide emissions, which are then distributed for free (via a pre-decided fractional subdivision formula) as individual allowance permits that are subsequently marketed in an international cap-and-trade system. The model of the paper suggests that the majority-voted price is likely to be less distortionary and easier to enact than the majority-voted total quantity of permits. Some possible implications for climate-change negotiations are noted.

Publisher's Version

Last updated on 09/22/2017