A fundamental and highly relevant question for climate policy design is whether price controls, such as CO2 taxes, or quantity restrictions, such as emission quotas, should be preferred. This paper shows that as the reach of climate policies is limited either geographically or in terms of...

Future market developments determine the fate of fossil fuel carbon currently conserved unilaterally. Dynamic fuel depletion naturally suggests leakage rates approaching 100%. Reasons for lower leakage differ from what limits rates in previous studies. Discounting reduces present-value leakage...