The assessment of climate change mitigation policies through economic modeling depends crucially on assumptions under which technological change has been incorporated in the model. Earlier climate-energy-economics modeling attempts heavily relied on the assumption of exogenous technological...

This paper examines the effects of combining an international cap-and-trade scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium model with log-normally distributed uncertainty. The situation is analogous to the situation where European countries impose...