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The CO2 Abatement Game: Costs, Incentives and the Stability of a Sub-Global Coalition

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Author Info
Mustafa Babiker (University of Colorado at Boulder)
Abstract

This paper studies the economic incentives and the institutional issues governing the outcomes of a short-term climate change policy package guided by the United Nations' Framework Convention on Climate Change and the Berlin Mandate initiatives. Game theoretic tools and the global trade-environment interface are explored within a 26-region, 13- commodity computable general equilibrium framework to characterize the incentives of OECD regions to comply with a non-binding agreement in a carbon abatement coalition. The results have shown that the achievement of such a coalition as well as its expansion by means of self-financed schemes are possible if suitable trade instruments are designed.

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Paper provided by EconWPA in its series Computational Economics with number 9807002.

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Length: 55 pages
Date of creation: 26 Jul 1998
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Handle: RePEc:wpa:wuwpco:9807002

Note: Type of Document - pdf; prepared on IBM PC - PC-TEX/UNIX Sparc TeX; to print on HP/PostScript/Franciscan monk; pages: 55 ; figures: included. This work has one the Society of Computational Economics' contest for graduate student paper 1998
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Related research
Keywords: CGE Abatement CO2 coalition subgame connected-game;

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C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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  1. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen. [Downloadable!] (restricted)
  2. Chichilnisky, Graciela & Heal, Geoffrey, 1994. "Who should abate carbon emissions? : An international viewpoint," Economics Letters, Elsevier, vol. 44(4), pages 443-449, April. [Downloadable!] (restricted)
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  3. Schelling, Thomas C, 1992. "Some Economics of Global Warming," American Economic Review, American Economic Association, vol. 82(1), pages 1-14, March.
  4. Larsen, Bjorn & Shah, Anwar, 1994. "Global tradable carbon permits, participation incentives, and transfers," Policy Research Working Paper Series 1315, The World Bank. [Downloadable!]
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  5. Pindyck, Robert S, 1979. "Interfuel Substitution and the Industrial Demand for Energy: An International Comparison," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 169-79, May. [Downloadable!] (restricted)
  6. Nordhaus, William D, 1993. "Reflections on the Economics of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 11-25, Fall. [Downloadable!] (restricted)
  7. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October. [Downloadable!] (restricted)
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  8. John Whalley & Randall Wigle, 1991. "Cutting CO2 Emissions: The Effects of Alternative Policy Approaches," The Energy Journal, International Association for Energy Economics, vol. 12(1), pages 109-124.
  9. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January. [Downloadable!] (restricted)
  10. Whalley, John, 1991. "The Interface between Environmental and Trade Policies," Economic Journal, Royal Economic Society, vol. 101(405), pages 180-89, March. [Downloadable!] (restricted)
  11. Piggott, John & Whalley, John & Wigle, Randall, 1993. "How large are the incentives to join subglobal carbon-reduction initiatives?," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 473-490. [Downloadable!] (restricted)
  12. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring. [Downloadable!] (restricted)
  13. Farrell, Joseph & Maskin, Eric, 1989. "Renegotiation in repeated games," Games and Economic Behavior, Elsevier, vol. 1(4), pages 327-360, December. [Downloadable!] (restricted)
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