In most models of transboundary pollution, lack of international cooperation does not cause any inefficiency within each country. The paper shows that this result is only valid in the hypothetical case of no international trade. With international trade, we get a domestic inefficiency in...

It is a widely held view that efficient environmental policies regulating transboundary pollution will be adopted only if there is interjurisdictional coordination. Efficient policies can be adopted as a result of interstate treaties or mandated by a central authority. However, if the policies...

With limited participation in an international climate agreement, standard economic analysis suggests that a unilateral action taken by a group of countries in order to reduce its emissions is likely to be undermined by increases in emissions from other countries (carbon leakage). While analyses...

A standard result in the literature on environmental economics is that efficient environmental policies regulating transboundary pollution will be adopted only if there is interjurisdictional coordination. Efficient policies can be adopted as a result of interregional treaties or mandated by a...