In the last two decades increasing attention has been paid to the relationship between environmental degradation and economic development. According to the Environmental Kuznets Curve (EKC) hypothesis this relationship may be described by an inverted-U curve. However, recent evidence rejects the...

This paper analyses the cost implications for climate policy in developed countries if developing countries are unwilling to adopt measures to reduce their own GHG emissions. First, we assume that a 450 CO2 (550 CO2e) ppmv stabilisation target is to be achieved and that Non Annex1 (NA1)...

The efficiency effects of carbon pricing depend on how it impacts distortions in fossil fuel markets, most notably from local air pollution externalities. By offsetting these distortions, carbon pricing may generate significant net economic benefits, so it is in countries own interests to...

Has the Kyoto Protocol induced carbon leakage? We conduct the first empirical ex-post evaluation of the Protocol. We derive a theoretical gravity equation for the CO2 content of trade, which accounts for intermediate inputs, both domestic and imported. The structure of our new panel database of...

We examine long-run treaties for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this...

This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...

International climate negotiations take place in a setting where uncertainties regarding the impacts of climate change are very large. In this paper, we examine the influence of increasing the probability and impact of large climate change damages, also known as the ‘fat tail’, on the...

If the threshold that triggers climate catastrophe is known with certainty, and the benefits of avoiding catastrophe are high relative to the costs, treaties can easily coordinate countries’ behavior so as to avoid the threshold. Where the net benefits of avoiding catastrophe are lower,...

In this paper we discuss the global negotiations now underway and aimed at achieving new climate change mitigation and other arrangements after 2012 (the end of the Kyoto commitment period). These were initiated in Bali in December 2007 and are scheduled to conclude by the end of 2009 in...

We model countries' choice of greenhouse gas (GHG) emissions as a dynamic game. Emissions generate immediate benefits to the emitting country but also increase atmospheric GHG concentrations that negatively affect present and future welfare of all countries. Because there are no international...