Document Type

Article

Journal/Book Title/Conference

Resource and Energy Economics

Publisher

ScienceDirect

Publication Date

12-5-2017

DOI

10.1016/j.reseneeco.2017.11.003

Abstract

We develop a differential game within a general equilibrium framework of carbon sequestration with and without international trade. We characterize the game's equilibrium and demonstrate how a global carbon permit market can be structured to induce the participation of developing countries through the harnessing of their potential to sequester carbon. We show that a permit market with carbon sequestration is mutually welfare improving for developed and developing nations, and that international trade in finished goods and carbon permits lowers the stock of global pollution.

Included in

Economics Commons

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