An Economic Theory of Emission Cap Determination by an International Agreement
We attempt to clarify the problem of determination of national emission endowments under the Kyoto protocol. We argue that many issues, such as assigning culpability and compensation for the current global stock of carbon and the linking of emission endowments to per capita entitlements, are better handled through direct lump-sum transfers and not via distortions of the endowments of emission flows. Given these arguments, we model the distribution of endowments as equilibrium of a non-cooperative game. This framework allows us to make qualitative predictions about the impact of international differences on the pattern of emission caps. We also perform simple comparative statistic exercises that predict how the equilibrium caps vary with parametric changes. Moreover, we study how nations can manipulate the emission caps by strategic investment in technology and damage control.
|Date of creation:||Dec 2000|
|Date of revision:|
|Contact details of provider:|| Postal: Delhi 110 007|
Phone: (011) 27667005
Fax: (011) 27667159
Web page: http://www.cdedse.org/
More information through EDIRC
|Order Information:|| Web: http://www.cdedse.org/ Email: |
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.:
- Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
- Stavins, Robert & Hahn, Robert, 1999. "What Has Kyoto Wrought? The Real Architecture of International Tradable Permit Markets," Discussion Papers dp-99-30, Resources For the Future.
When requesting a correction, please mention this item's handle: RePEc:cde:cdewps:88. 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: (Sanjeev Sharma)
If references are entirely missing, you can add them using this form.