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Valuing Tradeable CO2 Permits for OECD Countries

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  • Karp, Larry
  • Liu, Xuemei

Abstract

We estimate a structural model of OECD countries in which GDP and CO2 emissions are endogenous. We use the estimated model to simulate the price of tradable CO2 permits and the efficiency gains from trade. Our estimated prices are high, relative to previous estimates, and the efficiency gains are substantial. We also find, contrary to previous literature, that higher income is associated with reduced emissions.
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Suggested Citation

  • Karp, Larry & Liu, Xuemei, 1999. "Valuing Tradeable CO2 Permits for OECD Countries," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5dv5c8hr, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt5dv5c8hr
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    References listed on IDEAS

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    More about this item

    Keywords

    tradeable permits; greenhouse gasses; carbon reductions; environmental Kuznets curve;
    All these keywords.

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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