In this paper we argue that when a subgroup of countries cooperate on emission reduction, the optimal response of non-signatory countries reflects the interaction between three potentially opposing factors, the incentive to free-ride on the benefits of cooperation, the incentive to expand the...

June 2000 - Most proposals for joint implementation of energy projects emphasize installing more technically efficient capital equipment to allow reduced energy use for any given mix of input and output. But increases in energy efficiency are likely to have second-round effects. Reducing energy...

Carbon leakage provides an efficiency argument for unilateral climate policy to differentiate emission prices in favor of emission-intensive and trade-exposed sectors. At the same time, differential emission pricing can be (mis-)used as a beggar-thy-neighbor policy to exploit terms of trade....