Climate change is one of the greatest challenges of our time. It is a global problem that has to be understood in the context of a globalising world with an increasing amount of goods being traded. This dissertation focuses on the interrelation between international trade and climate policies....

Optimal climate policy is studied. Coal, the abundant resource, contributes more CO2 per unit of energy than the exhaustible resource, oil. We characterize the optimal sequencing oil and coal and departures from the Herfindahl rule. “Preference reversal” can take place. If coal is very dirty...