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

Jared C. Carbone, Carsten Helm and Thomas F. Rutherford

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

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.

JEL-codes: D7 F18 F42 Q58 (search for similar items in EconPapers)
Date: 2009
Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77402/
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Citations: View citations in EconPapers (6)

Published in Darmstadt Discussion Papers in Economics . 194 (2009)

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Related works:
Journal Article: The case for international emission trade in the absence of cooperative climate policy (2009)
Working Paper: The case for international emission trade in the absence of cooperative climate policy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:77402

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