Climate Stabilization Taxation-and-Bonds Strategy Adjusted for Consumption
Climate Stabilization Taxation-and-Bonds Strategy Adjusted for Consumption

Author(s): Julia M. Puaschunder
Subject(s): Business Economy / Management, Law on Economics
Published by: Scientia Moralitas Research Institute
Keywords: Climate Change; Climate Stabilization; Economics
Summary/Abstract: Current climate change mitigation and adaptation financing efforts are calling for innovative green investment strategies. An emerging literature and awareness on the economic gains and losses of a warming globe being distributed unequally between countries can serve as novel basis of redistribution schemes. A taxation-and-bonds strategy over the entire world could fund climate change alleviation. A financial asset transfer could be enacted in form of tax-debt mechanisms. Proposed taxation and bonds strategy could aid in broad-based and long-term market incentivization of a transition to a clean energy economy. Strategies could feature some countries’ financing green bonds via carbon taxation, while other countries are climate bonds premium recipients. The bonds recipients would be funded by the climate taxation countries. The bonds could be tradable and issued controlled by global governance institutions, such as the International Monetary Fund, the World Bank, the United Nations or the World Trade Organization. In most redistribution schemes with market incentives, such as – for example – the cap-and-trade emissions trading system, the CO2 emissions levels are addressed. This article advocates for attention to potential economic gains from a warming globe as a source of assets for redistribution. These gains could be redistributed to areas and industries of the world that are clearly losing from climate change immediately. Contrary to most economic redistribution models concerning climate change that primarily weight in relative CO2 emissions for production, this paper argues for attention to CO2 emissions consumption levels. The trade-adjusted consumption-based CO2 emissions levels appear fairer in the judgment what countries have a higher responsibility to fund the burden of climate change. Market-mechanisms – such as consumption taxation and price mark-ups for consumers – are discussed as additional market strategies to redistribute costs, risks and losses implied by climate change.

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