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Free trade and global warming : a trade theory view of the Kyoto protocol

  • Copeland,B.R.
  • Taylor,M.S.

    (University of Wisconsin-Madison, Social Systems Research Institute)

This paper demonstrates how three important results in environmental economics, true under mild conditions in closed economies, are false or need serious amendment in a world with international trade in goods. Since the three results we highlight have framed much of the ongoing discussion and research on the Kyoto protocol our viewpoint from trade theory suggests a re-examination may be in order. Specifically, we demonstrate that in an open trading world, but not in a closed economy setting: (1) unilateral emission reductions by the rich North can create self-interested emission reductions by the unconstrained poor South; (2) simple rules for allocating emission reductions across countries (such as uniform reductions) may well be efficient even if international trade in emission permits is not allowed; and (3) when international emission permit trade does occur it may make both participants in the trade worse off and increase global emissions.

(This abstract was borrowed from another version of this item.)

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Paper provided by Wisconsin Madison - Social Systems in its series Working papers with number 4.

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Date of creation: 2000
Date of revision:
Handle: RePEc:att:wimass:20004

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  1. Gordon H. Hanson & Matthew J. Slaughter, 1999. "The Rybczynski Theorem, Factor-Price Equalization, and Immigration: Evidence from U.S. States," NBER Working Papers 7074, National Bureau of Economic Research, Inc.
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  5. CHANDER, Parkash & TULKENS, Henry, . "Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems," CORE Discussion Papers RP 983, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  7. McKibbin, Warwick J. & Shackleton, Robert & Wilcoxen, Peter J., 1999. "What to expect from an international system of tradable permits for carbon emissions," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 319-346, August.
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  10. Hoel, M., 1990. "Efficient International Agreements For Reducing Emissions Of Co2," Memorandum 06/1990, Oslo University, Department of Economics.
  11. Richard A. Brecher & Ehsan U. Choudhri, 1982. "Immiserizing Investment from Abroad: The Singer-Prebisch Thesis Reconsidered," The Quarterly Journal of Economics, Oxford University Press, vol. 97(1), pages 181-189.
  12. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
  13. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998. "Is Free Trade Good for the Environment?," NBER Working Papers 6707, National Bureau of Economic Research, Inc.
  14. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  15. David Card & John E. DiNardo, 2000. "Do Immigrant Inflows Lead to Native Outflows?," NBER Working Papers 7578, National Bureau of Economic Research, Inc.
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  17. repec:tpr:qjecon:v:109:y:1994:i:3:p:755-87 is not listed on IDEAS
  18. Jorgenson, Dale W. & Wilcoxen, Peter J., 1993. "Reducing US carbon emissions: an econometric general equilibrium assessment," Resource and Energy Economics, Elsevier, vol. 15(1), pages 7-25, March.
  19. Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc.
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