Many models of economic growth exclude materials, energy and other intermediate inputs from the production function. Growing environmental pressures and resource prices suggest that this may be increasingly inappropriate. This paper explores the relationship between intermediate input intensity,...

This paper analyses the design of carbon markets in time (intertemporally) and space (geographically) from first principles, starting initially with a relatively clean slate and asking what an optimal global carbon market would look like by around 2030. Our focus is on firmlevel trading systems,...

The lack of real progress at the Durban climate change conference in 2011�postponing effective action until at least 2020�has many causes, one of which is the failure to address trade issues and in particular carbon leakage. This paper advances two arguments. First, it argues that the...

This paper examines the operation of an emissions trading scheme (ETS) in a Cournot oligopoly. We study the impact of the ETS on industry output, price, costs, emissions, and profits. In particular, we develop formulae for the number of emissions permits that have to be freely allocated to firms...