(2009) International Emission Policy with Lobbying and Technological Change. Published in "Dynamic Systems, Economic Growth and the Environment", edited by J. Crespo Cuaresma, T. Palokangas and A. Tarasyev. Springer Verlag.

Abstract. I examine emission policy in a union of countries when production in any country incurs emissions that pollute all over the union, but efficiency in production is improved by research and development (R&D). I compare four cases: Laissez-faire, Pareto optimal policy, and the case of a self-interested central planner that decides on nontraded or traded emission quotas. I show that with nontraded quotas, the growth rate is socially optimal, but welfare sub-optimal. Trade in quotas speeds up growth from the initial position of laissez-faire, but slows down growth from the initial position of nontraded quotas.

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