Fiscal Implications of Climate Change

This paper provides a primer on the fiscal implications of climate change, in particular the policies for responding to it. Many of the complicated challenges that arise in limiting climate change (through greenhouse gas emissions mitigation), and...

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Bibliographic Details
Main Authors:	Jones, Benjamin, Keen, Michael, Strand, Jon
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABATEMENT COSTS ABATEMENT POLICIES ABSORPTION ADAPTATION FUND ADAPTATION TO CLIMATE CHANGE ADVERSE IMPACT AGGREGATE DEMAND AGGREGATE EMISSIONS AIR ALLOCATION ALLOWANCES ALUMINUM ANNUAL EMISSION APPROACH ATMOSPHERIC CONCENTRATIONS BALANCE BARREL OF OIL BASELINE EMISSIONS BURNING FOSSIL FUELS CAPITAL GAINS CAPS CARBON CARBON CAPTURE CARBON CREDITS CARBON EMISSIONS CARBON MARKET CARBON MARKETS CARBON PRICE CARBON PRICES CARBON PRICING CARBON SEQUESTRATION CARBON TAX CARBON TAX REGIMES CARBON TAXES CATASTROPHIC EVENTS CHEMICALS CLEAN DEVELOPMENT CLEAN DEVELOPMENT MECHANISM CLIMATE CLIMATE CHANGE CLIMATE CHANGE IMPACTS CLIMATE CHANGES CLIMATE DAMAGE CLIMATE DAMAGES CLIMATE EFFECTS CLIMATE OBJECTIVES CLIMATE POLICY CLIMATES CO CO2 COAL COAL RESERVES COASTAL AREAS COASTAL ZONES CONSUMER PRICE CONVENTIONAL TECHNOLOGIES CONVERGENCE COST OF ABATEMENT CUTTING EMISSIONS DAMAGES DEFORESTATION DIESEL DIFFUSION DISCOUNT RATE DISTRIBUTIONAL EFFECTS DOMESTIC HEATING DROUGHT DROUGHT INSURANCE ECONOMIC ANALYSIS ECONOMIC IMPACT ECONOMIC IMPACTS ECONOMICS OF CLIMATE CHANGE ELASTICITY OF DEMAND ELASTICITY OF SUBSTITUTION ELECTRICITY ELECTRICITY GENERATION ELECTRICITY PRODUCERS EMISSION EMISSION REDUCTION EMISSION RIGHTS EMISSIONS FROM DEFORESTATION EMISSIONS FROM TRANSPORTATION EMISSIONS INTENSITY EMISSIONS LIMITS EMISSIONS PRICES EMISSIONS QUOTA EMISSIONS REDUCTION EMISSIONS REDUCTIONS EMISSIONS RIGHTS EMPLOYMENT ENERGY CONSUMPTION ENERGY EFFICIENCY ENERGY INTENSIVE ENERGY MARKETS ENERGY POLICY ENERGY PRICE ENERGY PRICES ENERGY SECURITY ENERGY SUBSIDIES ENERGY TAXES ENERGY USE ENVIRONMENTAL DAMAGE ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY EXTREME EVENTS EXTREME WEATHER EXTREME WEATHER EVENTS FAT TAILS FEASIBILITY FINANCIAL FLOWS FINANCIAL INFLOWS FISCAL POLICIES FOREST FOREST CARBON FORESTRY FOSSIL FOSSIL ENERGY FOSSIL FUEL FOSSIL FUEL DEMAND FOSSIL FUEL PRICES FOSSIL FUEL PRODUCERS FOSSIL FUEL USE FOSSIL FUELS FREE ALLOCATION FUEL DEMAND FUEL EXTRACTION FUEL PRICE FUEL PRICES FUEL PRICING FUEL SUPPLY FUEL TYPE FUTURE CONSUMPTION GAS RESERVES GASOLINE GASOLINE PRICES GASOLINE TAX GASOLINE TAX RATE GENERAL EQUILIBRIUM MODEL GHG GHGS GLOBAL CARBON EMISSIONS GLOBAL EMISSIONS GLOBAL WARMING GREEN TECHNOLOGIES GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS GREENHOUSE GAS EMISSIONS MITIGATION GREENHOUSE GASES HARMFUL EMISSIONS HIGHER ENERGY PRICES HURRICANE IMPORTS INCOME INCOME TAX CREDIT INSURANCE INSURANCE SCHEMES INTERNATIONAL ENERGY AGENCY INVESTMENT DECISIONS IPCC IRON KEROSENE LEVEL OF EMISSIONS LOWER DISCOUNT RATE LUMP SUM LUMP SUM TRANSFERS MARGINAL ABATEMENT MARGINAL COST MARGINAL UTILITY MARKET FAILURE MARKET FAILURES MARKET INTEREST RATE METALS MITIGATING CLIMATE CHANGE MONETARY FUND MORAL HAZARD NITROUS OXIDES NUCLEAR POWER OCEANS OIL OIL PRODUCERS OIL PRODUCTION OXIDES PARTICULATES PER CAPITA EMISSION PERFORMANCE STANDARD PERFORMANCE STANDARDS PERMIT PRICE PETROLEUM PETROLEUM PRODUCTS PHYSICS PLANT GROWTH POLLUTANTS PRECAUTIONARY PRINCIPLE PRECIPITATION PRESENT VALUE PRICE OF ENERGY-INTENSIVE GOODS PRICE VOLATILITY PRICES OF ENERGY PRODUCERS OF ENERGY PUBLIC ECONOMICS PUBLIC SPENDING RADIATION REDUCTION IN EMISSIONS REGIONAL GREENHOUSE GAS INITIATIVE RENEWABLE ENERGY REVENUE RECYCLING SCENARIOS SEQUESTRATION TECHNOLOGIES SHIPS STORMS SUBSTITUTION SUPPLY SIDE TAX CREDITS TAX INTERACTION TAX POLICIES TAX RATES TAX REVENUE TAX REVENUES TEMPERATURE TIGHTER CAP TOTAL EMISSIONS TRADABLE ALLOWANCES UNCERTAINTIES UTILITIES UTILITY BILLS WASTE WELFARE LOSSES WIND WIND SPEEDS WINDFALL PROFITS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120119135947 http://hdl.handle.net/10986/3241

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Summary:	This paper provides a primer on the fiscal implications of climate change, in particular the policies for responding to it. Many of the complicated challenges that arise in limiting climate change (through greenhouse gas emissions mitigation), and in dealing with the effects that remain (through adaptation to climate change impacts), are of a fiscal nature. While mitigation has the potential to raise substantial public revenue (through charges on greenhouse gas emissions), adaptation largely leads to fiscal outlays. Policies may unduly favor public spending (on technological solutions to limit emissions, and on adaptation), over policies that lead to more public revenue being raised (emissions charges). The pervasive uncertainties that surround climate change make the design of proper policy responses even more complex. This applies especially to policies for mitigation of emissions, since agreement on and international enforcement of cooperative abatement policies are exceedingly difficult to achieve, and there is as yet no common view on how to compare nearer-term costs of mitigation to longer-term benefits.

Fiscal Implications of Climate Change

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