ABSTRACT
AMONG THE MOST CONTENTIOUS contemporary international issues in-volving economics are the problems of trans-border externalities caused by environmental pollution such as acid rain.1 A particular problem of this genre that has attracted widespread interest is the phenomenon of global warming caused by the accumulation of greenhouse gas (GHG) pollution in the atmosphere, henceforth referred to as carbon accumulation. It is widely believed that carbon accumulation will lead to a variety of physical changes that will have significant deleterious effects on most human societies. Unlike phenomena such as acid rain, which concern small numbers of adjoining countries, the carbon externality is a global problem.Given the inability to reduce the carbon stock, the Kyoto Protocol (United Nations 1997) proposes to retard the growth of the stock by regulating fresh flows into it.
