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The Case for International Emission Trade in the Absence of Cooperative Climate Policy

Carbone, Jared C. and Helm, Carsten and Rutherford, Thomas F. (2008):
The Case for International Emission Trade in the Absence of Cooperative Climate Policy.
In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://tuprints.ulb.tu-darmstadt.de/4732],
[Report]

Abstract

We evaluate the efficacy of international trade in carbon emission permits when countries are guided strictly by their national self-interest. To do so, we construct a calibrated general equilibrium model that jointly describes the world economy and the strategic incentives that guide the design of national abatement policies. Countries' decisions about their participation in a trading system and about their initial permit endowment are made noncooperatively; so a priori it is not clear that permit trade will induce participation in international abatement agreements or that participation will result in significant environmental gains. Despite this, we find that emission trade agreements can be effective; that smaller groupings pairing developing and developed-world partners often perform better than agreements with larger rosters; and that general equilibrium responses play an important role in shaping these outcomes.

Item Type: Report
Erschienen: 2008
Creators: Carbone, Jared C. and Helm, Carsten and Rutherford, Thomas F.
Title: The Case for International Emission Trade in the Absence of Cooperative Climate Policy
Language: English
Abstract:

We evaluate the efficacy of international trade in carbon emission permits when countries are guided strictly by their national self-interest. To do so, we construct a calibrated general equilibrium model that jointly describes the world economy and the strategic incentives that guide the design of national abatement policies. Countries' decisions about their participation in a trading system and about their initial permit endowment are made noncooperatively; so a priori it is not clear that permit trade will induce participation in international abatement agreements or that participation will result in significant environmental gains. Despite this, we find that emission trade agreements can be effective; that smaller groupings pairing developing and developed-world partners often perform better than agreements with larger rosters; and that general equilibrium responses play an important role in shaping these outcomes.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 194
Uncontrolled Keywords: Global warming, coalitions, general equilibrium, tradable permits
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Angewandte Mikroökonomik und Institutionenökonomik
Date Deposited: 31 Jan 2016 20:56
Official URL: http://tuprints.ulb.tu-darmstadt.de/4732
URN: urn:nbn:de:tuda-tuprints-47321
Additional Information:

JEL - Classification : D7, F18, F42, Q58

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