In the static context with which Chapters 1, 2, and 3 are concerned, we have postulated that the welfare effect of global warming is measured in relation to the total quantity of CO2 emitted annually into the atmosphere, where the dependency on the stock of CO2 accumulated in the atmosphere is not explicitly brought out. Each greenhouse gas is so measured as to equate the greenhouse effect with the activity of carbon dioxide, and our model is formulated so that carbon dioxide is the only chemical agent that has a greenhouse effect. The behavior of individual countries is expressed in the aggregate by two representative economic agents: the consumers who are concerned with the choice of economic activities related to consumption and the producers who are in charge of the choice of technologies and scale of productive activities.
The economic welfare of each country ν is represented by the utility function
where cν is the vector of goods consumed in country ν and a is the aggregate of CO2 emissions aν of individual countries ν in the world: