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We assume that resource-importing countries are characterized by the same economic parameters. The model should apply to countries with comparable endowments and production technologies, which compete on international capital markets. These could be member states of the EU, or China and the USA. Each resource-importing country’s initial endowment of public and private capital is given by the same share of the initial global endowment. Table 5 summarizes the parameters used in the model.
We thank U. Weddige and A. Marxen for support with visualizing data, G. Schmidt-Traub, B. Wils, G. Hutton and J. Lim for support with the data, T. Hausotter of the German Federal Enterprise for International Cooperation (GIZ) for comments on an early draft of the paper, and A. Churiakova for research assistance.
Discussion Paper 2015-67, Harvard Project on Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School Fiscal considerations may shift governmental priorities away from environmental concerns: Finance ministers face strong demand for public expenditures such as infrastructure investments but they are constrained by international tax competition.
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