In a domestic market, a duopoly produces a homogeneous final good, pollution, pollution abatement and R&D. One of the firms (foreign) has superior technology. The government regulates the duopoly by levying a pollution tax to maximize domestic welfare. We consider the potential implementation of...

We study the effects of environmental policy commitments in a futuristic world in which solar radiation management (SRM) can be utilized to reduce climate change damages. Carbon and sulfur dioxide emissions (correlated pollutants) can be reduced through tradable permits. We show that if both...