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

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

Research output: Contribution to journalArticle

28 Scopus citations

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 (US)
Pages (from-to)319-346
Number of pages28
JournalResource and Energy Economics
Volume21
Issue number4
StatePublished - Aug 1 1999
Externally publishedYes

Keywords

  • Climate change
  • Greenhouse gas emissions control
  • Internationally tradable permits

ASJC Scopus subject areas

  • Economics and Econometrics

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