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The Potential Effects of International Carbon Emissions Permit Trading

Author

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  • Warwick J McKibbin

    ()

  • Robert Shackleton
  • Peter J Wilcoxen

Abstract

We use an econometrically estimated multi-region, multi-sector general equilibrium model of the world economy to examine the effects of the tradable emissions permit system proposed in the 1997 Kyoto protocol, under various assumptions about that extent of international permit trading. We focus, in particular, on the effects of the system on international trade and capital flows. Our results suggest that consideration of these flows significantly affects estimates of the domestic effects of the emissions mitigation policy, compared with analyses that ignore international capital flows.

Suggested Citation

  • Warwick J McKibbin & Robert Shackleton & Peter J Wilcoxen, 1998. "The Potential Effects of International Carbon Emissions Permit Trading," Departmental Working Papers 1998-09, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:1998-09
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp1998/kyotoPaper61.pdf
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    References listed on IDEAS

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    2. 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.
    3. 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.
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    6. W. J. McKibbin & P. J. Wilcoxen, "undated". "Environmental Policy and International Trade," Discussion Papers 117, Brookings Institution International Economics.
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    8. Lawrence H. Goulder & Barry Eichengreen, 1989. "Savings Promotion, Investment Promotion, and International Competitiveness," NBER Chapters,in: Trade Policies for International Competitiveness, pages 5-52 National Bureau of Economic Research, Inc.
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    13. Goulder Lawrence H., 1995. "Effects of Carbon Taxes in an Economy with Prior Tax Distortions: An Intertemporal General Equilibrium Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 271-297, November.
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    Cited by:

    1. U. Ciorba & A. Lanza & F. Pauli, 2001. "Kyoto Commitment And Emissions Trading: A European Union Perspective," Working Paper CRENoS 200102, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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