Emission leakage could potentially undermine the effectiveness of unilateral climate policies. Significant emission … means of consumption-based emission pricing) is not an optimal policy. Hence, one should consider a broad scope of trade … measures to reduce leakage, focusing on a few highly traded, emission-intensive industries. Finally, the optimal policy …

pollution. We find that optimal emission paths are qualitatively different for substitutes and complements. We derive general … properties governing optimal emission paths and present numerical examples to illustrate our main results. In particular we find … that optimal emission paths need not be monotonic, even for highly symmetric pollutants. Finally, we describe a …