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A policy x is Pareto efficient if no other policy Pareto Pareto efficiency is important for two reasons. 1. . Free trade, high stakes testing, carbon tax, sanctions.

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In the proposed auction mechanism, the assignment outcome is Pareto efficient and the carbon emission rights' resources are efficiently used.

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environment or trade, is for some reason constrained away from the optimal: see, . Section IV considers Pareto-efficient policies when carbon taxes and tariffs.

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Definition: Pareto's efficiency is defined as the economic situation when the circumstances of one individual cannot be made better without making the situation.

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trade tax policies. Starting from an initial equilibrium in which the world econ- omy is characterised by Pareto-efficient policies, no government can alter carbon.

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Policies: cap & trade, BC Carbon tax. Slide 1 production efficient if it is not possible to reallocate these inputs .. equilibrium in this model is Pareto efficient.