This paper presents a model of international environmental agreements in which cooperation between asymmetric countries can arise through pure self-interest. It demonstrates how emissions trading creates economic surplus by exploiting asymmetries. This surplus can be distributed via the...

This paper analyses the optimal type and degree of commitment to a future climate policy when damage costs from climate change are uncertain. Taking uncertainty into account, it is shown within the framework of a sequential game between firms and a regulator that commitment to an emission...