External balance, dynamic efficiency, and the welfare effects of unilateral and multilateral permit policies in interdependent economies
This paper investigates domestic and foreign welfare effects of unilateral and multilateral permit policies in a two-country overlapping generations model with producer carbon emissions. We show that the welfare effects of a more stringent cap on emissions depend on the external balance of the policy implementing country, the dynamic (in)efficiency of the world economy, and the preference for environmental quality. Under dynamic efficiency, the global welfare loss of policy implementation in a net foreign creditor country is lower than of a policy in the net foreign debtor country. Moreover, although the country which has unilaterally implemented a permit policy would gain from a multilateral policy, the associated welfare loss for the other country is larger than that of a unilateral policy abroad.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alfred Endres, 2008. "Ein Unmöglichkeitstheorem für die Klimapolitik?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(3), pages 350-382, 08.
- Maurice Obstfeld, 1988.
"Fiscal Deficits and Relative Prices in a Growing World Economy,"
NBER Working Papers
2725, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1989. "Fiscal deficits and relative prices in a growing world economy," Journal of Monetary Economics, Elsevier, vol. 23(3), pages 461-484, May.
- Zee, Howell H, 1987. "Government Debt, Capital Accumulation, and the Terms of Trade in a Model of Interdependent Economies," Economic Inquiry, Western Economic Association International, vol. 25(4), pages 599-618, October.
- Persson, Torsten, 1985.
"Deficits and intergenerational welfare in open economies,"
Journal of International Economics,
Elsevier, vol. 19(1-2), pages 67-84, August.
- Torsten Persson, 1983. "Deficits and Intergenerational Welfare in Open Economies," NBER Working Papers 1083, National Bureau of Economic Research, Inc.
- Pierre-André Jouvet & Philippe Michel & Gilles Rotillon, 2004.
"Optimal growth with pollution : how to use pollution permits ?,"
Cahiers de la Maison des Sciences Economiques
v04012, Université Panthéon-Sorbonne (Paris 1).
- Jouvet, Pierre-Andre & Michel, Philippe & Rotillon, Gilles, 2005. "Optimal growth with pollution: how to use pollution permits?," Journal of Economic Dynamics and Control, Elsevier, vol. 29(9), pages 1597-1609, September.
- Tetsuo Ono, 2002.
"The Effects of Emission Permits on Growth and the Environment,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 21(1), pages 75-87, January.
- Ono, Tetsuo, 2001. "The Effects of Emission Permits on Growth and the Environment," Discussion Paper 33, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Birgit Bednar-Friedl & Karl Farmer & Andreas Rainer, 2010.
"Effects of Unilateral Climate Policy on Terms of Trade, Capital Accumulation, and Welfare in a World Economy,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 47(4), pages 495-520, December.
- Karl Farmer & Birgit Bednar-Friedl & Andreas Rainer, 2008. "Effects of Unilateral Climate Policy on Terms of Trade, Capital Accumulation, and Welfare in a World Economy," CESifo Working Paper Series 2375, CESifo Group Munich.
- Bréchet, Thierry & Lambrecht, Stéphane & Prieur, Fabien, 2009. "Intertemporal transfers of emission quotas in climate policies," Economic Modelling, Elsevier, vol. 26(1), pages 126-134, January.
- Brian R. Copeland & M. Scott Taylor, 2000.
"Free Trade and Global Warming: A Trade Theory View of the Kyoto Protocol,"
NBER Working Papers
7657, National Bureau of Economic Research, Inc.
- Copeland, Brian R. & Taylor, M. Scott, 2005. "Free trade and global warming: a trade theory view of the Kyoto protocol," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 205-234, March.
- Copeland,B.R. & Taylor,M.S., 2000. "Free trade and global warming : a trade theory view of the Kyoto protocol," Working papers 4, Wisconsin Madison - Social Systems.
- repec:cup:cbooks:9780521322249 is not listed on IDEAS
- Ghosh, Atish R., 1992. "Fiscal policy, the terms of trade, and the external balance," Journal of International Economics, Elsevier, vol. 33(1-2), pages 105-125, August.
- Gilles Rotillon & Pierre-André Jouvet & Philippe Michel, 2004.
"Equilibrium with a Market of Permits,"
2004.94, Fondazione Eni Enrico Mattei.
- Bohringer, Christoph & Vogt, Carsten, 2004. "The dismantling of a breakthrough: the Kyoto Protocol as symbolic policy," European Journal of Political Economy, Elsevier, vol. 20(3), pages 597-617, September.
- Frenkel, Jacob A & Razin, Assaf, 1986.
"The International Transmission and Effects of Fiscal Policies,"
American Economic Review,
American Economic Association, vol. 76(2), pages 330-35, May.
- Jacob A. Frenkel & Assaf Razin, 1986. "The International Transmission and Effects of Fiscal Policies," NBER Working Papers 1799, National Bureau of Economic Research, Inc.
- Lipton, David & Sachs, Jeffrey, 1983. "Accumulation and growth in a two-country model : A simulation approach," Journal of International Economics, Elsevier, vol. 15(1-2), pages 135-159, August.
- repec:cup:cbooks:9780521311120 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:27:y:2010:i:5:p:980-990. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.