Unilateral Emission Cuts and Carbon Leakages in a Dynamic North–South Trade Model

Partha Sen ()
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Partha Sen: Delhi University

Environmental & Resource Economics, 2016, vol. 64, issue 1, No 7, 152 pages

Abstract: Abstract The effects of a unilateral cut in emissions are analyzed in a dynamic two-country model. Two (intermediate) goods are produced, one of which uses the fossil fuel. These inputs are traded and combine to produce a final good. The effect of a cut in fossil fuel use by a bloc (e.g. Annexure 1 countries in the Kyoto Protocol) depends on whether the fuel is priced at marginal cost or above. In the latter case a “green paradox” may appear. The paper’s contribution lies in analyzing the dynamics and trade implications of the unilateral action.

Keywords: Unilateral emission cuts; Kyoto Protocol; Carbon leakage; Green paradox; Hotelling rule (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10640-014-9860-2

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