Citizen Carbon Fund: Harmonized International Carbon Taxes and Transfers to Increase Treaty Size

A uniform carbon tax and Citizen Carbon Fund are proposed as a zero-sum system of transfers that can increase equilibrium participation and result in a positive carbon check for each citizen covered by the agreement. The carbon tax results in efficient abatement, generates tax revenue and finances transfers that increase equilibrium participation in a climate agreement. A single carbon price is easier to negotiate than many different abatement requirements, but mirrors the results of a cap-and-trade agreement. An example using the four largest carbon emitters illustrates the set of stable agreements, the transfers required for stability and the resulting carbon checks.