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Greenhouse-Gas Emission Controls In An Open Economy

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  • Jota Ishikawa
  • Kazuharu Kiyono

Abstract

To examine how greenhouse-gas emission controls affect a country's industrial and trade structures, this article presents an open economy model that has both Ricardian and Heckscher-Ohlin features. We specifically compare emission quotas, emission taxes, and emission standards. The patterns of production and trade critically hinge on those policy tools. It is shown that a domestic emission control may lead to carbon leakage and may not reduce the world emissions, and that emission standards may work as a "hidden" production subsidy toward an emission-intensive industry. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Jota Ishikawa & Kazuharu Kiyono, 2006. "Greenhouse-Gas Emission Controls In An Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 431-450, May.
    • Handle: RePEc:ier:iecrev:v:47:y:2006:i:2:p:431-450
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