We use a two-period model to investigate intertemporal effects of cost reductions in climate change mitigation technologies for the power sector. The effect of cost reductions for CCS depends on how carbon taxes are set. If there is no carbon tax in period 1, but an optimally set carbon tax in...

With endogenous product prices, nationwide wage-setting gives lower unemployment than decentralized wage-setting. However, intermediate-level wage-setting may give more unemployment than both completely decentralized and completely centralized wage-setting. The main part of the paper considers a...

We study an international climate agreement that assigns emission quotas to each participating country. Unlike the simplest models in the literature, we assume that abatement costs are affected by R&D activities undertaken in all firms in all countries, i.e. abatement technologies are...