Estimates of the inflation effect of a global carbon price on consumer, investment, export and import prices

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Abstract

This chapter considers the potential inflation effects of a global carbon price on consumer prices, investment prices, export prices, and import prices. We estimate the effects under three different scenarios. The results clearly indicate that the inflation effects in developed countries of a 100 USD/ton carbon price are small. For developing countries, the inflation effect is larger-potentially too large for it to be politically feasible to introduce a global carbon price. However, a simple adjustment of the price based on the price level in each country equalizes the inflation effects across all countries. In light of this kind of adjustment, a global carbon price is more likely to be implemented.

Original languageEnglish
Title of host publicationCarbon Dioxide Emissions
Subtitle of host publicationPast, Present and Future Perspectives
PublisherNova Science Publishers, Inc.
Chapter4
Pages87-112
Number of pages26
ISBN (Electronic)9781536177640
ISBN (Print)9781536177633
Publication statusPublished - 2020 Apr 9

Subject classification (UKÄ)

  • Economics

Free keywords

  • Carbon price
  • Climate change
  • Consumer prices
  • Export prices
  • Import prices
  • Inflation
  • Investment prices

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