GLOBAL WARMING AND CARBON TAXATION - OPTIMAL POLICY AND THE ROLE OF ADMINISTRATION COSTS

This paper develops a model relating CO2 emissions to atmospheric conc entrations, global temperature change and economic damages. For a vari ety of parameter assumptions, the model provides estimates of the marg inal cost of emissions in various years. The optimal carbon tax is a f unction of the marginal emission cost and the costs of administering t he tax. This paper demonstrates that under any reasonable assumptions, the optimal carbon tax is zero for at least several decades.