This paper investigates the welfare costs of unilateral versus internationally coordinated emission permit policies in a two-country overlapping generations model with producer carbon emissions. We show that, for a net foreign debtor country, the domestic welfare costs of a unilateral domestic...

This article compares nationally optimal to internationally optimal (Pareto efficient) emission permit levels in a two-country overlapping generations model with national emission permit systems and the environment as a global public good. When each government maximizes its steady state economic...

We present a two-good, two-country overlapping generations model where emissions arise from production and each country has a domestic emission permit system. When one country unilaterally reduces her cap on emissions, her output available for domestic and foreign consumption diminishes more...