In this paper, we develop a model of international trade and climate change in which emission discharges arising from production have a feedback effect on national production sectors by impacting upon effective factor endowments. With this context, the objectives are, first, to provide a general characterization of Pareto-efficient climate and trade policies and, second, to examine the possibility - starting from non-Pareto-efficient equilibria - for Pareto-improving environmental policies. We provide conditions under which several particular reforms of carbon taxes are welfare improving. © 2013 Elsevier Inc.
Kotsogiannis, C., & Woodland, A. (2013). Climate and international trade policies when emissions affect production possibilities. Journal of Environmental Economics and Management, 66(2), 166–184. https://doi.org/10.1016/j.jeem.2012.12.005