FEEM working papers "Note di lavoro" series
2003 .104

Emissions Trading Regimes and Incentives to Participate in International Climate Agreements

Authors: Carlo Carraro, Barbara Buchner
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Agreements,Climate,Incentives,Negotiations,Policy
JEL n.: C72,H23,Q25,Q28
JEL: European Environment
Pages: Volume 14, Issue 5, pp. 276-289
Date: September/October 2004


This paper analyses whether different emissions trading regimes provide different incentives to participate in a cooperative climate agreement. Different incentive structures are discussed for those countries, namely the US, Russia and China, that are most important in the climate negotiation process. Our analysis confirms the conjecture that, by appropriately designing the emission trading regime, it is possible to enhance the incentives to participate in a climate agreement. Therefore, participation and optimal policy should be jointly analysed. Moreover, our results show that the US, Russia and China have different most preferred climate coalitions and therefore adopt conflicting negotiation strategies.

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