The countries that have ratified the Kyoto Protocol have pledged to limit global warming by reducing the demand for fossil fuels. But what about supply? If suppliers do not react, demand reductions by a subset of countries are ineffective. They simply depress the world price of carbon and induce the environmental sinners to consume what the Kyoto countries have economized on. Even worse, if suppliers feel threatened by a gradual greening of economic policies in the Kyoto countries that would damage their future prices; they will extract their stocks more rapidly, thus accelerating global warming. The paper discusses the remaining policy options against global warming from an intertemporal supply-side perspective.

is gratefully acknowledged. Helmut Alt, Ralph Schuster and Christoph Weissbart kindly provided background data and information. The author is emeritus professor at Ludwig-Maximilian University of Munich. He has no financial interests in the nuclear, fossil fuel or green energy industries nor is he affiliated with a political party. He wishes to thank the editors and three anonymous referees for their extremely useful advice. The paper is dedicated to Wolfgang Meister who has served the ifo Institute for many years with commitment, precision and care and who is now retiring. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Alemania tiene una amplia experiencia en subsidios que afectan el empleo, como los que discute actualmente en Chile el Consejo Asesor Presidencial de Trabajo y Equidad. Existe, entonces, la oportunidad de apreciar cuáles iniciativas han dado resultado y cuáles no. En estas páginas se sostiene que para construir una sociedad moderna se necesita un Estado benefactor. Sin embargo, si el ingreso mínimo es generoso, se comprime la distribución salarial desde abajo y habrá una considerable tasa de desempleo entre los trabajadores no calificados. La prueba más clara al respecto es el enorme desempleo en Alemania Oriental después de la unificación. Para conciliar la meta ética de asegurar empleo con la meta de asegurar ingreso, se requiere que el Estado benefactor ofrezca un ingreso mínimo mayor a quien trabaja que a quien permanece inactivo.

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