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Is Emission Trading Beneficial?

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Author Info

  • Jota Ishikawa
  • Kazuharu Kiyono
  • Morihiro Yomogida

Abstract

We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding South's production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries.

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File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd10-180.pdf
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Bibliographic Info

Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd10-180.

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Date of creation: Mar 2011
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Handle: RePEc:hst:ghsdps:gd10-180

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Related research

Keywords: global warming; emission quota; emission trading; carbon leakage; Kyoto Protocol;

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References

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  1. Markusen, James R. & Morey, Edward R. & Olewiler, Nancy, 1995. "Competition in regional environmental policies when plant locations are endogenous," Journal of Public Economics, Elsevier, vol. 56(1), pages 55-77, January.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Should there be international trade in pollution rights?
    by Economic Logician in Economic Logic on 2011-05-02 14:50:00
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Cited by:
  1. Kiyono, Kazuharu & Ishikawa, Jota, 2011. "Environmental Management Policy under International Carbon Leakage," CCES Discussion Paper Series 45, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.

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