This paper quantifies the macroeconomic impacts of the Kyoto Protocol's Clean Development Mechanism (CDM) employing a computable general equilibrium model of international trade and energy use. We incorporate project-based CDM supply data in order to assess the relative importance of transaction...

We consider an economy where production generates externalities, which can be reduced by additional firm level expenditures. This requires firms to raise outside financing, leading to deadweight loss due to a standard agency problem vis-à-vis outside investors. Policy is constrained as firms...

In view of the controversial policy debate on “green” growth and corresponding stimulus packages we empirically investigate the production effects of environmental investment as well as of environmental and energy expenditures. Using a panel dataset of German manufacturing sectors our...

We analyze the problem of introducing a new substitute for a polluting process. The environmental effects of this substitute are uncertain but will be resolved over time. In a two-period model where two stock pollutants are substitutes in the abatement cost function, we show that the...