Steffen Kallbekken and Torben K. Mideksa explain why economic analysis may demand sharp emissions reductions today rather than the gradual path recommended by Sheila Olmstead and Robert Stavins.

There are often conflicts between proponents of trade and environmental activists. This paper shows, however, how trade agreements can be designed so as to motivate environmental conservation. I first analyze a standard trade model, where resource exploitation (e.g., deforestation) is a...