I am very happy that my paper The Social Cost of Carbon in a Non-cooperative World has now been accepted for publication in the Journal of International Economics.
This paper analyzes the influence of international trade on the social cost of carbon and on the optimal abatement strategies. We find that the optimal taxes are proportional to national GDP and can be decomposed into a domestic and a foreign component where the latter stems from trade. Besides, heterogeneity in country-specific damage functions together with the size of international trade significantly affects the regional distribution of the SCC. Consequently, trade can also affect the total amount of carbon dioxide emitted into the atmosphere.
Many thanks to my co-authors Holger Kraft and Eduardo S. Schwartz for the huge effort we had with this paper!