Policies of lowering carbon demand may aggravate rather than alleviate climate change (green paradox). In a two-period three-country general equilibrium model with finite endowment of fossil fuel one country enforces an emissions cap in the first or second period. When that cap is tightened the...

Policies of lowering carbon demand may aggravate rather than alleviate climate change (green paradox). In a two-period three-country general equilibrium model with finite endowment of fossil fuel one country enforces an emissions cap in the first or second period. When that cap is tightened the...

Taxing imports from regions which are not subject to climate policy and subsidi-zing exports into these regions have recently been proposed to address presu-med negative effects of the EU Emissions Trading Scheme (EU ETS) on in-dustry competitiveness and carbon leakage. This paper analyzes the...