We attempt to clarify the problem of determination of national emission endowments under the Kyoto protocol. We argue that many issues, such as assigning culpability and compensation for the current global stock of carbon and the linking of emission endowments to per capita entitlements, are better handled through direct lump-sum transfers and not via distortions of the endowments of emission flows. Given these arguments, we model the distribution of endowments as equilibrium of a non-cooperative game. This framework allows us to make qualitative predictions about the impact of international differences on the pattern of emission caps. We also perform simple comparative statistic exercises that predict how the equilibrium caps vary with parametric changes. Moreover, we study how nations can manipulate the emission caps by strategic investment in technology and damage control.
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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number
88.
For technical questions regarding this item, or to correct its listing, contact: (Vinayan. K.P).
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Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
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