This paper concerns optimal emissions of greenhouse gases when catastrophic consequences are possible. A numerical model is presented which takes into account both continuous climate-feedback damages as well as the possibility of a catastrophic outcome. The uncertainty in the model concerns...

The paper analyzes the relationship between trade policy and environmental protection. National and global environmental issues are distinguished. In principle, there is no conflict between an institutional order for international trade and national environmental policy. Protectionism against...

This paper addresses the timing and interdependence between innovation and environmental policy in a model of research and development (R&D). On a first-best path the environmental tax is set at the Pigouvian level, independent of innovation policy. With infinite patent lifetime, the R&D subsidy...