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The Potential Effects of International Carbon Emissions Permit Trading

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  • Warwick J McKibbin
  • Robert Shackleton
  • Peter J Wilcoxen

Abstract

We use an econometrically estimated multi-region, multi-sector general equilibrium model of the world economy to examine the effects of the tradable emissions permit system proposed in the 1997 Kyoto protocol, under various assumptions about that extent of international permit trading. We focus, in particular, on the effects of the system on international trade and capital flows. Our results suggest that consideration of these flows significantly affects estimates of the domestic effects of the emissions mitigation policy, compared with analyses that ignore international capital flows.

Suggested Citation

  • Warwick J McKibbin & Robert Shackleton & Peter J Wilcoxen, 1998. "The Potential Effects of International Carbon Emissions Permit Trading," Departmental Working Papers 1998-09, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:1998-09
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp1998/kyotoPaper61.pdf
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    2. Edwin Woerdman & Wytze van der Gaast, 2001. "Project-Based Emissions Trading: The Impact of Institutional Arrangements on Cost-Effectiveness," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 6(2), pages 113-154, June.
    3. Fr�d�ric Ghersi & Jean-Charles Hourcade & Patrick Criqui, 2003. "Viable responses to the equity-responsibility dilemma: a consequentialist view," Climate Policy, Taylor & Francis Journals, vol. 3(sup1), pages 115-133, November.
    4. Perrels, Adriaan, 2000. "Greenhouse Gas Policy Questions and Socio-economic Research Implications for Finland in a National and International Context," Discussion Papers 222, VATT Institute for Economic Research.
    5. Ghersi, Frederic & Hourcade, Jean-Charles, 2001. "The Economics of a Lost Deal," RFF Working Paper Series dp-01-48-, Resources for the Future.
    6. U. Ciorba & A. Lanza & F. Pauli, 2001. "Kyoto Commitment And Emissions Trading: A European Union Perspective," Working Paper CRENoS 200102, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    7. Farhana Yamin & Jean-Marc Burniaux & Andries Nentjes, 2001. "Kyoto Mechanisms: Key Issues for Policy-makers for COP-6," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 1(2), pages 187-218, April.

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