TY  - JOUR
AU  - Copeland,Brian R.
AU  - Taylor,M. Scott
TI  - Free Trade and Global Warming: A Trade Theory View of the Kyoto Protocol
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7657
PY  - 2000
Y2  - April 2000
UR  - http://www.nber.org/papers/w7657
L1  - http://www.nber.org/papers/w7657.pdf
N1  - Author contact info:
Brian Copeland
Department of Economics
The University of British Columbia
#997-1873 East Mall
Vancouver, BC  V6T 1Z1 CANADA
E-Mail: copeland@econ.ubc.ca

M. Scott Taylor
IEE Canada Research Chair
Department of Economics
The University of Calgary
2500 University Drive, N.W.
Calgary, AB T2N 1N4
CANADA
Tel: 403/220-8912
Fax: 403/282-5262
E-Mail: mstaylor@ucalgary.ca
AB  - This paper demonstrates how three important results in environmental economics, true under mild conditions in closed economies, are false or need serious amendment in a world with international trade in goods. Since the three results we highlight have framed much of the ongoing discussion and research on the Kyoto protocol our viewpoint from trade theory suggests a re-examination may be in order. Specifically, we demonstrate that in an open trading world, but not in a closed economy setting: (1) unilateral emission reductions by the rich North can create self-interested emission reductions by the unconstrained poor South; (2) simple rules for allocating emission reductions across countries (such as uniform reductions) may well be efficient even if international trade in emission permits is not allowed; and (3) when international emission permit trade does occur it may make both participants in the trade worse off and increase global emissions.
ER  -