The interrelationship between economic growth, efficient use of natural resources, and sustainability has been of great interest to economists, researchers and policy makers. Knowledge of actual causality direction between sustainability, efficiency and growth has important implications for...

We develop an overlapping generations endogenous growth model with stocks of produced capital, human capital, a non-renewable resource, and irreversibly accumulated greenhouse gases in deterministic and stochastic versions. The model allows for analyzing different elasticities of substitution....

Carbon pricing regulates emission flows and collects rents from underlying fossil resource stocks. The resulting investment shift implies lower climate policy costs and improved welfare if capital is underaccumulated. We prove that under emission trading, such a beneficial macroeconomic...

California has long been a leader in both its attempts to preserve land devoted to agricultural production and in its approach to funding its state and local governments. Recently it has become the leader in creating a statewide policy (AB 32) to reduce the amount of greenhouse gases generated...

A two-tier climate club exploits the comparative advantage of large countries to mete out punishments through trade, while taking their capacity to resist punishment as a constraint. Countries outside the coalition price carbon at a fixed fraction of the average carbon price adopted within the...

An effective, legally binding, and enforceable climate club needs to be immediately created. The climate problem has become a threat to humankind. The historical perpetrators are the western countries, but today increasingly major developing countries. The climate-club solution may prove to be...

In a dynamic, three-region environmental multi-sector general equilibrium model (called EMuSe), we find that carbon pricing generates a recession initially as production costs rise. Benefits from lower emissions damage materialize only in the medium to long run. A border adjustment mechanism...