This paper presents a baseline dynamic general-equilibrium model of environmental policy for a two-country economy and studies the international transmission of several asymmetric shocks considering three different economy-wide greenhouse gases (GHG) emission regulations: (i) national...

This paper critically assesses the literature on the relationship between economic integration and the environment. In particular, we investigate how trade liberalization and capital market integration affect environmental policy and thus environmental quality. Conversely, we also study how...

Standard environmental economics prescribes policies which are optimal and implemented immediately. The paper argues that, in reality, environmental policy often deviates from the optimum and implementation is not deterministic but subject to major uncertainty and frequent change. We present a...