Climate policy in the shadow of national security
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Climate policy in the shadow of national security. / Kruse-Andersen, Peter K.
In: Economics Letters, Vol. 222, 110923, 01.2023.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Climate policy in the shadow of national security
AU - Kruse-Andersen, Peter K.
PY - 2023/1
Y1 - 2023/1
N2 - Historical events underscore that heavy reliance on foreign fossil fuel supply may come at a national security cost. The present study derives the optimal policy of a net fossil fuel importing economy with a binding climate target, when fossil fuel imports are associated with national security costs. The study shows that optimal carbon taxes are differentiated across fossil fuels and that domestic fossil fuel production should be subsidized. Further, carbon capture and storage should be taxed, while no subsidies should be granted to green energy production. These results contrast the typical climate policy recommendation of uniform carbon taxation.
AB - Historical events underscore that heavy reliance on foreign fossil fuel supply may come at a national security cost. The present study derives the optimal policy of a net fossil fuel importing economy with a binding climate target, when fossil fuel imports are associated with national security costs. The study shows that optimal carbon taxes are differentiated across fossil fuels and that domestic fossil fuel production should be subsidized. Further, carbon capture and storage should be taxed, while no subsidies should be granted to green energy production. These results contrast the typical climate policy recommendation of uniform carbon taxation.
KW - Faculty of Social Sciences
KW - climate policy
KW - national security
KW - energy security
KW - environmental taxes and subsidies
U2 - 10.1016/j.econlet.2022.110923
DO - 10.1016/j.econlet.2022.110923
M3 - Journal article
VL - 222
JO - Economics Letters
JF - Economics Letters
SN - 0165-1765
M1 - 110923
ER -
ID: 325632567