GEP Research Paper 01/23
How Effective and Efficient Can the Kyoto Protocol Be in Controlling Global Carbon Dioxide Emissions?
A. Caplan, R. Cornes and E. Silva
Abstract
We derive the circumstances under which the Kyoto Protocol leads to effective and efficient control of emissions of carbon dioxide. Carbon dioxide emissions are by-products of industrial production or deforestation. Since these emissions generate a positive private consumption benefit as well as a negative and global externality, we utilize the impure public good model to describe tastes. We find that the 'Kyoto Protocol Game' is Pareto efficient. We also show that both abatement trading and interregional transfers, implemented by an international authority, are necessary for the efficiency and effectiveness of the Kyoto Protocol.
Issued in October 2001.
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