@article{FranksKalkuhlLessmann2023,
  author    = {Franks, Max and Kalkuhl, Matthias and Lessmann, Kai},
  title     = {Optimal pricing for carbon dioxide removal under inter-regional leakage},
  series = {Journal of environmental economics and management},
  volume    = {117},
  journal   = {Journal of environmental economics and management},
  publisher = {Elsevier},
  address   = {Amsterdam},
  issn      = {1096-0449},
  doi       = {10.1016/j.jeem.2022.102769},
  year      = {2023},
  abstract  = {Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best policy rules for CDR subsidies and carbon taxes when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage and a balance of resource trade effect. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, net carbon exporters exacerbate this wedge to increase producer surplus of their carbon resource producers, implying even larger removal subsidies. Third, net carbon importers may set their removal subsidy even below their carbon tax when marginal environmental damages are small, to appropriate producer surplus from carbon exporters.},
  language  = {en}
}
@article{SurethKalkuhlEdenhoferetal.2023,
  author    = {Sureth, Michael and Kalkuhl, Matthias and Edenhofer, Ottmar and Rockstr{\"o}m, Johan},
  title     = {A welfare economic approach to planetary boundaries},
  series = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik},
  volume    = {243},
  journal   = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik},
  number    = {5},
  publisher = {De Gruyter Oldenbourg},
  address   = {Berlin},
  issn      = {0021-4027},
  doi       = {10.1515/jbnst-2022-0022},
  pages     = {477 -- 542},
  year      = {2023},
  abstract  = {The crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth's regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetary scale. To do so, we develop a model framework and explore decision paradigms that give guidance to setting limits on human activities. This conceptual framework is then applied to planetary boundaries. We conclude by using the realized insights to derive a research agenda that builds on the understanding of planetary boundaries as global commons.},
  language  = {en}
}