A Regional Dynamic General-Equilibrium Model Of Alternative Climate-Change Strategies

Most analyses treat global warming as a single-agent problem. The present study presents the Regional Integrated model of Climate and the Economy (RICE) model. By disaggregating into countries, the model analyzes different national strategies in climate-change policy: pure market solutions, efficient cooperative outcomes, and non-cooperative equilibria. This study finds that cooperative policies show much higher levels of emissions reductions than do non-cooperative strategies; that there are substantial differences in the levels of controls in both the cooperative and the non-cooperative policies among different countries; and that high-income countries may be the major losers from cooperation. (JEL H41, Q4, Q2, Q20)

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