What to expect from an international system of tradable permits for carbon emissions

Warwick J. McKibbin, Robert Shackleton*, Peter J. Wilcoxen

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    29 Citations (Scopus)

    Abstract

    We use an econometrically-estimated multi-region, multi-sector general equilibrium model of the world economy to examine the effects of using a system of internationally-tradable emissions permits to control world carbon dioxide emissions. We focus, in particular, on the effects of the system on flows of trade and international capital. Our results show that international trade and capital flows significantly alter projections of the domestic effects of emissions mitigation policy, compared with analyses that ignore international capital flows, and that under some systems of international permit trading the United States is likely to become a significant permit seller, the opposite of the conventional wisdom.

    Original languageEnglish
    Pages (from-to)319-346
    Number of pages28
    JournalResource and Energy Economics
    Volume21
    Issue number4
    DOIs
    Publication statusPublished - Aug 1999

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