Open AccessIS EMISSION TRADING BENEFICIAL? *
Author(s) -
ISHIKAWA JOTA,
KIYONO KAZUHARU,
YOMOGIDA MORIHIRO
Publication year - 2012
Publication title -
the japanese economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.205
H-Index - 28
eISSN - 1468-5876
pISSN - 1352-4739
DOI - 10.1111/j.1468-5876.2012.00570.x
Subject(s) - emissions trading , carbon leakage , economics , international economics , international trade , production (economics) , greenhouse gas , macroeconomics , ecology , biology
We develop a two‐country (North and South), two‐good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in the North may result in carbon leakage by expanding the South's production of the emission‐intensive good, international emission trading may induce the North to expand the production of the emission‐intensive good by importing emission permits. Emission trading may deteriorate the global environment. The North's (South's) emission trading may not benefit the South (North). International emission trading improves global efficiency but may not benefit both countries.
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