Global CO2-Trade And Local Externalities (2001)
BibTeX
@MISC{Schleiniger01globalco2-trade,
author = {Reto Schleiniger and Reto Schleiniger},
title = {Global CO2-Trade And Local Externalities},
year = {2001}
}
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Abstract
The burning of fossil fuels not only causes CO 2 emissions but at the same time impairs local environmental quality such as ambient air quality. The present paper analyzes the possible distortion arising from international trade in CO 2 emissions when local externalities persist. It is theoretically derived that the maximal possible distortion is determined by the difference in factor endowment and population density of the trading regions. Moreover, an empirical illustration for Switzerland shows that a rich country buying emission rights sustains a welfare loss. Keywords: International CO 2 policy, emission trading, second-best analysis JEL classification: D62, H21, Q40 . I am indebted to Michael Kosfeld and Urs Fischbacher for many helpful comments. 2 1
Keyphrases
local externality global co2-trade possible distortion trading region many helpful comment welfare loss international co fossil fuel ur fischbacher second-best analysis jel classification emission trading ambient air quality population density international trade present paper rich country michael kosfeld factor endowment emission right maximal possible distortion local environmental quality empirical illustration
