PUB - Publikationen an der Universität Bielefeld

This paper studies the effects of global warming in a descriptive model of endogenous growth with multiple regions. It is assumed that deviations from the global surface temperature, which result from an increase in greenhouse gas emissions, negatively affect aggregate output and the marginal product of capital. The paper derives optimal abatement ratios in the noncooperative world and for the cooperative case assuming that the growth rate is an endogenous variable. Furthermore, the cooperative situation is compared to the outcome resulting when abatement shares are set such that marginal damages in all regions are equal. (c) 2004 Elsevier B.V. All rights reserved.