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We derive non-cooperative Nash equilibrium (NE) importer and exporter petroleum excise taxes given full within-group tax coordination, but no coordination between groups, assuming that importers do not produce and exporters do not consume petroleum, and petroleum consumption causes a global externality. The aggregate NE tax is found to consist of an externality component and an optimal tariff component, and exceeds the standard Pigou tax. The environmental component in isolation is however less than the Pigou tax. With Stackelberg tax setting, the leader's tax is higher than in the Ne, and the follower's tax lower, and the overall tax higher. We show that importers prefer to set a tax instead of an import quota, since exporters' optimal response to a quota is a higher tax. An optimal cap-and-trade scheme will thus fare worse than an optimal tax scheme for importers, and will imply greater petroleum consumption and carbon emissions. When exporters behave as a cartel satisfying demand at a fixed export price, exporters' optimal tax is higher, while importers tax rule is Pigouvian. Exporters then gain at the expense of importers.

Petroleum --- Mineral oils --- Petroleum industry and trade --- Taxation. --- Taxation --- Investments: Energy --- Macroeconomics --- Environmental Conservation and Protection --- Energy: General --- Business Taxes and Subsidies --- Climate --- Natural Disasters and Their Management --- Global Warming --- Energy: Demand and Supply --- Prices --- Macroeconomics: Consumption --- Saving --- Wealth --- Investment & securities --- Public finance & taxation --- Climate change --- Oil --- Oil, gas and mining taxes --- Greenhouse gas emissions --- Oil prices --- Consumption --- Greenhouse gases --- Economics --- Russian Federation

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'Commodity Boom: How Long Will It Last?' asks how economies will fare after the record-high prices of key raw materials posted in recent months, which build on dramatic increases from their lows of 2000. The lead article warns that the impact on headline inflation levels might persist throughout 2008, even without further commodity price hikes. It urges policymakers to ensure efficient functioning of market forces at the global level, and to move swiftly to protect the poorest. Another article addresses the effects of climate change on agriculture, warning that farm production will fall dramatically—especially in developing countries—if steps are not taken to curb carbon emissions. Other articles on this theme argue that policies to reduce greenhouse gas emissions need not hobble economies, and that financial markets can help address climate change. 'People in Economics' profiles John Taylor; 'Picture This' says the global energy system is on an increasingly unsustainable path; 'Country Focus' spotlights South Africa; and 'Straight Talk' examines early warnings provided by credit derivatives. Also in this issue, articles examine China's increasing economic engagement with Africa, and the outsourcing of service jobs to other countries.

Foreign Exchange --- Macroeconomics --- Taxation --- Environmental Economics --- Environmental Conservation and Protection --- Climate --- Natural Disasters and Their Management --- Global Warming --- Commodity Markets --- Taxation and Subsidies: Externalities --- Redistributive Effects --- Environmental Taxes and Subsidies --- Agriculture: General --- Climate change --- Currency --- Foreign exchange --- Public finance & taxation --- Investment & securities --- Greenhouse gas emissions --- Carbon tax --- Exchange rate arrangements --- Emissions trading --- Climatic changes --- Greenhouse gases --- Prices --- Environmental impact charges --- United States

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This paper discusses the implications of climate change for fiscal, financial, and macroeconomic policies. Most pressing is the use of carbon taxes (or equivalent trading systems) to implement the emissions mitigation pledges submitted by 186 countries for the December 2015 Paris Agreement while providing revenue for lowering other taxes or debt. Carbon pricing in developing countries would effectively mobilize climate finance, and carbon price floor arrangements are a promising way to coordinate policies internationally. Targeted fiscal measures that are tailored to national circumstances and robust across climate scenarios are needed to counter private sector under-investment in climate adaptation. And increased disclosure of carbon footprints, stress testing of asset values, and greater proliferation of hedging instruments, will facilitate low-emission investments and climate risk diversification through financial markets.

Taxation --- Environmental Economics --- Environmental Conservation and Protection --- Natural Disasters --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environmental Economics: Government Policy --- Taxation and Subsidies: Externalities --- Redistributive Effects --- Environmental Taxes and Subsidies --- Environmental Economics: General --- Climate change --- Public finance & taxation --- Natural disasters --- Environmental economics --- Carbon tax --- Greenhouse gas emissions --- Climate finance --- Environment --- Taxes --- Climatic changes --- Environmental impact charges --- Greenhouse gases --- China, People's Republic of

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This paper provides an overview of global solid waste generation, its environmental costs, and fiscal instruments that can be used to encourage waste reduction and finance proper disposal. Countries—especially island nations--struggle to manage an ever-increasing volume of solid waste, generation of which is projected to exceed 2 billion tons a year by 2025. Although solid waste management is usually relegated to subnational governments, externalities from inadequate management, which include greenhouse gas emissions and ocean plastic pollution, reach global scale. National governments thus play a critical role in creating incentives for waste minimization and ensuring adequate resources for proper waste management. This paper evaluates potential fiscal instruments to achieve these goals, particularly in developing country policy environments.

Macroeconomics --- Public Finance --- Environmental Economics --- Environmental Conservation and Protection --- Aggregate Factor Income Distribution --- Macroeconomics: Consumption --- Saving --- Wealth --- National Government Expenditures and Related Policies: General --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environmental Economics: General --- Public finance & taxation --- Climate change --- Environmental economics --- Income --- Consumption --- Public expenditure review --- Greenhouse gas emissions --- Environment --- National accounts --- Expenditure --- Economics --- Expenditures, Public --- Greenhouse gases --- Environmental sciences --- South Africa

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Countries are increasingly committing to midcentury ‘net-zero’ emissions targets under the Paris Agreement, but limiting global warming to 1.5 to 2°C requires cutting emissions by a quarter to a half in this decade. Making sufficient progress to stabilizing the climate therefore requires ratcheting up near-term mitigation action but doing so among 195 parties simultaneously is proving challenging. Reinforcing the Paris Agreement with an international carbon price floor (ICPF) could jump-start emissions reductions through substantive policy action, while circumventing emerging pressure for border carbon adjustments. The ICPF has two elements: (1) a small number of key large-emitting countries, and (2) the minimum carbon price each commits to implement. The arrangement can be pragmatically designed to accommodate equity considerations and emissions-equivalent alternatives to carbon pricing. The paper discusses the rationale for an ICPF, considers design issues, compares it with alternative global regimes, and quantifies its impacts.

China, People's Republic of --- Environmental Conservation and Protection --- Environmental Economics --- Taxation --- Energy: Government Policy --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environmental Economics: Government Policy --- Taxation and Subsidies: Externalities --- Redistributive Effects --- Environmental Taxes and Subsidies --- Climate change --- Public finance & taxation --- Greenhouse gas emissions --- Environment --- Carbon tax --- Taxes --- Greenhouse gases --- Climatic changes --- Environmental impact charges