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What to Expect from an International System of Tradable Permits for Carbon Emmisions

Author

Listed:
  • Warwick J. McKibbin

    (Australian National University, Research School of Pacific and Asian Studies, Economics Division
    The Brookings Institution)

  • Robert Shackleton

    (U.S. Environmental Protection Agency, Policy Office)

  • Peter J. Wilcoxen

    (University of Texas, Economics Department
    The Brookings Institution)

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 emission 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 the 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 conventional wisdom.

Suggested Citation

  • Warwick J. McKibbin & Robert Shackleton & Peter J. Wilcoxen, 1998. "What to Expect from an International System of Tradable Permits for Carbon Emmisions," Economics and Environment Network Working Papers 9804, Australian National University, Economics and Environment Network.
    • Handle: RePEc:anu:eenwps:9804
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    tradable permits; international capital flows; policy;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • F30 - International Economics - - International Finance - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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