This paper presents first results from a new European-wide research network for evidence-based climate policy. Using administrative data on industrial firms in Finland, France, Germany, Lithuania, Norway, and Sweden,we construct harmonized measures of carbon dioxide emissions per job. We...

We study how public policies affects an economy where production emits pollutants and investment in productive assets raises the economy’s overall productivity. We explore two hypotheses about how the accumulation of pollutants affects human well-being. Under the first one, there is no limit...

We develop a 2-period emission trading model for a stock pollutant with demand shocks resolving over time. We find precise conditions for efficiency of a stabilization mechanism where cumulative available permits decrease with excess supply in early periods. Our model describes the stabilization...

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most...

This essay revisits the question of instrument choice for the regulation of externalities in the context of climate change. The central point is that the Pigouvian prescription to equate marginal control costs with the expected marginal benefits of damage reduction should guide the design of...

The economic effects of climate change vary across both time and space. To study these effects, this paper builds a global economy-climate model featuring a high degree of geographic resolution. Carbon emissions from the use of energy in production increase the Earth's (average) temperature and...

In most countries, environmental regulation focuses on local pollution, which causes damages near the emission source, while regulation on global pollutants such as greenhouse gases (GHG) has been slow. Theoretically, local and global pollutants can either be substitutes or complements in...

Many countries have pledged targets or actions to reduce greenhouse gas emissions; these have been listed in the Appendices to the Copenhagen Accord and, at the time of writing, are being transferred to the UNFCCC Cancún Agreements. This analysis examines the costs and effectiveness of these...

We study the impacts of carbon taxation of international transport fuels on CO2 emissions andtrade activity, focusing on maritime transport, which constitutes the most important internationaltrade transport activity. Our estimated bunker price elasticities range from 􀀀 0.03 to 􀀀 0.42....

Unilateral CO2 emission reduction can lead to carbon leakage, such as relocation of power-intensive and trade-exposed industries. In the EU emission trading system, these industries are also subjected to higher cost of electricity due to emission pricing in this sector. As a result, the...