We analyse effects of uncertain climate change and technological development on cost-effective abatement of nitrogen and phosphorus for a eutrophied sea. A dynamic model is developed which accounts for differences in the sea’s adjustment to the loads of the two nutrients, uncertainty in...

A rule for setting a tax on carbon emissions to limit their atmospheric stock to a predetermined level is developed for a world inhabited by uncoordinated, myopic, expected utility maximizing agents. In all locations, the mean of the marginal product of the carbon emitting input diminishes and...

If emissions are stochastic and firms are unable to control them through abatement, the cap in a permit market may be exceeded, or not be reached. I derive a binary options pricing formula that expresses the permit price as a function of the penalty for noncompliance and the probability of an...

Climate change due to emissions from fast growing developing economies of Asia is sounding an alarm bell for policymakers not only in Asia, but also in the world. This situation raises the urgent need for undertaking measures to control emissions with due consideration of the prevailing...

This paper analyzes the role of forest-based carbon sequestration in a unilateral EU27 emissions reduction policy under a Global Computable General Equilibrium (CGE) framework. Forestry mitigation is introduced into the model relying on carbon sequestration curves provided by a global forestry...

Quantity-based regulation with banking allows regulated firms to shift obligations across time in response to periods of unexpectedly high or low marginal costs. Despite its wide prevalence in existing and proposed emission trading programs, banking has received limited attention in past welfare...

Determining the social cost of carbon emissions (SCC) is a crucial step in the economic analysis of climate change policy as the US government’s recent decision to use a range of estimates of the SCC centered at $77/tC (or, equivalently, $21/tCO2) in cost-benefit analyses of proposed...

The Stern Review constitutes today the most complete and didactic synthesis of the economics of climate change. Despite appearances, it is not, however, a simple reference manual. Its most attractive feature is the author’s commitment to action in the face of climactic risk. The report’s...

In the wake of the Copenhagen Conference and the outstanding issue of shaping climate change mitigation for the period beyond that covered by the Kyoto protocol, this paper puts into context the various economic instruments available fot tackling climate change, and highlights the emergence, as...