ABSTRACT
This chapter presents an analysis of some key analytical aspects of international environmental problems and of the policies which will be needed to correct them. It identifies the analytically distinctive features of the global environmental public goods and examines the policies available for managing them efficiently, with emphasis on the use of tradable emission permits. Once emitted into the atmosphere, carbon dioxide mixes rapidly and thoroughly on a global scale. Its atmospheric concentration is therefore a global public good. The efficient provision of global, privately-produced public goods poses interesting challenges, both for economic theory and for policy choice and implementation. An argument in favor of joint implementation is that it can lead to improvements in the positions of all the countries engaged in the bargain. Indeed, the most frequently voiced concern about joint implementation is that a few countries could “steal the march” on others by taking advantage of a thin market with little information.
