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Who Should Abate Carbon Emissions? An International Viewpoint

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  • Graciela Chichilnisky
  • Geoffrey Heal

Abstract

We review the optimal pattern of carbon emission abatements across countries in a simple multi-country world. We model explicitly the fact that the atmosphere is a public good. Within this framework we establish conditions for it to be necessary for optimality that the marginal cost of abatement be the same in all countries. These condition are quite restrictive, and amount to either ignoring distributional issues between countries or operating within a framework within which lump-sum transfers can be made between countries. These results have implications for the use of tradeable emission permits, which as normally advocated will lead to the equalization of marginal abatement costs across countries. The observation that the atmosphere is a public good implies that we may need to look at a Lindahl equilibrium rather than a Walrasian equilibrium in tradeable permits.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4425.

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Date of creation: Aug 1993
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Publication status: published as Chichilnisky, G. and G. Heal. "Who Should Abate Carbon Emissions? An International Viewpoint," Economics Letters, 1994, v44(4), 443-450.
Handle: RePEc:nbr:nberwo:4425

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  1. Graciela Chichilnisky & Geoffrey Heal, 1993. "Global Environmental Risks," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 65-86, Fall.
  2. Chichilnisky, Graciela, 1993. "North-South trade and the dynamics of renewable resources," Structural Change and Economic Dynamics, Elsevier, vol. 4(2), pages 219-248, December.
  3. Chichilnisky, G., 1993. "Global Environment and North-South Trade," Papers 93-16, Columbia - Graduate School of Business.
  4. Chichilnisky, Graciela, 1993. "The abatement of carbon emissions in industrial and developing countries," MPRA Paper 8390, University Library of Munich, Germany.
  5. Graciela Chichilnisky & Geoffrey Heal, 1993. "Who Should Abate Carbon Emissions? An International Viewpoint," NBER Working Papers 4425, National Bureau of Economic Research, Inc.
  6. repec:fth:coluec:645 is not listed on IDEAS
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