The case for international emission trade in the absence of cooperative climate policy
AbstractWe evaluate the efficacy of international trade in carbon emission permits when countries are guided strictly by their national self-interest. To do so, we construct a calibrated general equilibrium model that jointly describes the world economy and the strategic incentives that guide the design of national abatement policies. Countries' decisions about their participation in a trading system and about their initial permit endowment are made non-cooperatively; so a priori it is not clear that permit trade will induce participation in international abatement agreements or that participation will result in significant environmental gains. Despite this, we find that emission trade agreements can be effective; that smaller groupings pairing developing and developed-world partners often perform better than agreements with larger rosters; and that general equilibrium responses play an important role in shaping these outcomes.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 58 (2009)
Issue (Month): 3 (November)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870
Global warming Coalitions General equilibrium Tradable permits;
Other versions of this item:
- Carbone, Jared C. & Helm, Carsten & Rutherford, Thomas F., 2008. "The Case for International Emission Trade in the Absence of Cooperative Climate Policy," Darmstadt Discussion Papers in Economics 35491, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- F18 - International Economics - - Trade - - - Trade and Environment
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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