Cutting CO2 Emissions: The Effects of Alternative Policy Approaches*

This paper starts from the premise that attempts to curtail global emissions of greenhouse gases are likely to be made in the next few decades. We discuss some of the possible international effects which could result from attempts to achieve such a cutback, and illustrate a methodology which we hope to extend, in subsequent work, to further evaluating the consequences of responding to the problem of global warming. We identify possible magnitudes of effects of cutting global CO₂ emissions, and illustrate ways in which inter-country terms-of-trade effects and changes in trade patterns may occur.