This paper models global environmental policy in a stochastic setting: reducing pollution not only reduces expected environmental damage but also its spread. The national incentives to cooperate are analysed under adverse conditions: expected payoffs are taken to have the structure of a (static)...

This paper models global environmental policy in a stochastic setting: reducing pollution not only reduces expected environmental damage but also its spread. The national incentives to cooperate are analysed under adverse conditions: expected payoffs are taken to have the structure of a (static)...

This paper analyzes firm incentives to diffuse and adopt advanced abatement technology for three different regimes of tradeable emission permits (auctioning, benchmarking, and grandfathering). We particularly consider technical change that decreases marginal abatement costs (MACs) only at high...

This paper analyzes both R&D in pollution control technology and pollution abatement by firms that are subject to environmental liability law (either strict liability or negligence) and are granted R&D subsidies. Firms differ in their R&D costs (private information) and experience technology...