Internalizing the global negative externality of carbon emissions requires flattening the extraction path of non …-renewable fossil-fuel resources (= world carbon emissions). Following Eichner and Pethig (2011b) we set up a two-country two …’s first-period emissions. The other country is the rest of the world and refrains from taking action. The climate coalition …

the world mean temperature exceeding 2 degrees Celsius. To achieve the two degree target, the cumulated global emissions …-effective policy of restricting emissions to the global carbon budget. In its simplest form, the cost-effective global policy is shown …-effective regulation may require the abating country to tax its first-period consumption and to tax or subsidize its emissions in the first …

consumption tax in the first period on world carbon emissions. If countries are identical or if the taxing country imports both … fossil fuel and consumption goods in the second period, increases in the tax rate lower first-period carbon emissions in both …

IEAs reduce total emissions only slightly compared to non-cooperation. Here we analyze the capacity of sign … reduce total emissions more effectively than the larger stable IEAs without tariffs. In the model with tariffs the signatory …

emissions tax rates are strategic substitutes. However, emissions tax rates are strategic complements if the pollution is not …

non-coalition countries with regard to emissions and welfare and compare business as usual with the coalition … liberalization by moving from autarky to free trade. Although the coalition steps up its mitigation effort, world emissions rise …

2006) the number of signatories of selfenforcing IEAs does not exceed three, if non-positive emissions are ruled out. We … traded on world markets. When signatory countries act as Stackelberg leader and emissions are positive, the size of stable …-enforcing IEAs would lead to stronger reductions of total emissions. Unfortunately, the allocation of total emissions in self …