Strategic Effects of Future Environmental Policy Commitments: Climate Change, Solar Radiation Management and Correlated Air Pollutants
45 Pages Posted: 6 Oct 2013
Date Written: September 3, 2013
We study the effects of environmental policy commitments in a futuristic world in which solar radiation management (SRM) can be utilized to reduce climate change damages. Carbon and sulfur dioxide emissions (correlated pollutants) can be reduced through tradable permits. We show that if both nations simultaneously commit to carbon permit policies, national SRM levels rise with the carbon quotas. Alternatively, if they simultaneously commit to SRM policies, the global temperature falls with each unit increase in the global SRM level. We also demonstrate that a nation always prefers to be a leader in either SRM or carbon policy.
Keywords: strategic environmental policy, policy commitments, correlated pollutants, solar radiation management, climate change
JEL Classification: C72, D62, D78, H41, Q41, Q53, Q54, Q58
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