ABSTRACT
As the environmental conferences in Kyoto 1997, in Buenos Aires in December 1998, and in The Hague and Bonn 2000 and 2001 have shown, there exists a broad consensus about the necessity of reducing greenhouse gas emissions in order to protect world climate. The specific policy measures and instruments for reducing emissions, however, are still under debate. The Kyoto Protocol (UN, 1997) contains quantified emission constraints for the industrialized (Annex-I) countries. The acceptance of the Kyoto Protocol by national legislative bodies and further commitments to emission reductions considerably depend to a large extent on the economic costs related to the implementation of emissions control. Appropriate policy measures have now to be imposed by the signatory countries in order to match their emission reduction objectives. National policies will induce allocational adjustments of production and consumption patterns in the countries, and will, therefore, lead to a change in their international competitiveness. Through international spillovers national emission reduction policies will also affect non-abating countries. It is less clear whether a specific country -subject to emission control or not – will benefit or lose from the changes in international prices.
