(3) Location subsidies to all non-energy sectors
Intuition: counteract leakage at the extensive intensive margin by reducing the profit loss from regulation
6/N
Intuition: counteract leakage at the extensive intensive margin by reducing the profit loss from regulation
6/N
Comments
Intuition: reduction in domestic consumption reduces net imports, thereby reducing the international price of green energy and thereby increasing foreign consumption, resulting in lower fossil fuel use
7/N
Intuition: increasing domestic production reduces net imports, thereby reducing the international price of green energy and thereby increasing foreign consumption, resulting in lower fossil fuel use
8/N
Intuition: increasing domestic production reduces net imports, thereby reducing the international price of green energy and thereby increasing foreign consumption, resulting in lower fossil fuel use
9/N
Intuition: reducing domestic production increases net imports, thereby increasing the international price of fossil fuels and thereby decreasing foreign consumption
10/N
With no aversion to leakage, only a uniform carbon tax is needed
11/N
End of 🧵
12/N