Who Should Abate Carbon Emissions? An International Viewpoint

Graciela Chichilnisky and Geoffrey Heal

No 4425, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We review the optimal pattern of carbon emission abatements across countries in a simple multi-country world. We model explicitly the fact that the atmosphere is a public good. Within this framework we establish conditions for it to be necessary for optimality that the marginal cost of abatement be the same in all countries. These condition are quite restrictive, and amount to either ignoring distributional issues between countries or operating within a framework within which lump-sum transfers can be made between countries. These results have implications for the use of tradeable emission permits, which as normally advocated will lead to the equalization of marginal abatement costs across countries. The observation that the atmosphere is a public good implies that we may need to look at a Lindahl equilibrium rather than a Walrasian equilibrium in tradeable permits.

JEL-codes: H4 Q2 (search for similar items in EconPapers)
Date: 1993-08
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Citations: View citations in EconPapers (9)

Published as Chichilnisky, G. and G. Heal. "Who Should Abate Carbon Emissions? An International Viewpoint," Economics Letters, 1994, v44(4), 443-450.

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Journal Article: Who should abate carbon emissions?: An international viewpoint (1994)
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