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Carbon, Trade Policy and Carbon Free Trade Areas

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  • Yan Dong
  • John Whalley

Abstract

Abstract This paper discusses both the potential contribution that trade policy initiatives can make towards the achievement of significant global carbon emissions reduction and the potential impacts of proposals now circulating for carbon reduction motivated geographical trade arrangements, including carbon-free trade areas. We first suggest that trade policy is likely to be a relatively minor consideration in climate change containment. The dominant influence on carbon emissions globally for the next several decades will be growth more than trade and its composition, and in turn, the size of trade seemingly matters more than its composition given differences in emission intensity between tradables and non-tradables. We then note that differences in emissions intensity across countries are larger than across products or sectors and so issues of country discrimination in trade policy (and violations of MFN) arise. Copyright 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 33 (2010)
Issue (Month): 9 (09)
Pages: 1073-1094

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Handle: RePEc:bla:worlde:v:33:y:2010:i:9:p:1073-1094

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References

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  1. Whalley, John, 1979. "Uniform domestic tax rates, trade distortions and economic integration," Journal of Public Economics, Elsevier, vol. 11(2), pages 213-221, March.
  2. Yan Dong & John Whalley, 2009. "Carbon Motivated Regional Trade Arrangements: Analytics and Simulations," NBER Working Papers 14880, National Bureau of Economic Research, Inc.
  3. Piggott, John & Whalley, John & Wigle, Randall, 1993. "How large are the incentives to join subglobal carbon-reduction initiatives?," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 473-490.
  4. John Whalley, 2006. "Recent Regional Agreements: Why so many, why so much Variance in Form, why Coming so fast, and where are they Headed?," CESifo Working Paper Series 1790, CESifo Group Munich.
  5. Gary Clyde Hufbauer & Carol Gabyzon, 1996. "Fundamental Tax Reform and Border Tax Adjustments," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa43, November.
  6. Nadim Ahmad & Andrew Wyckoff, 2003. "Carbon Dioxide Emissions Embodied in International Trade of Goods," OECD Science, Technology and Industry Working Papers 2003/15, OECD Publishing.
  7. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
  8. Ben Lockwood & John Whalley, 2008. "Carbon Motivated Border Tax Adjustments: Old Wine in Green Bottles?," NBER Working Papers 14025, National Bureau of Economic Research, Inc.
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Cited by:
  1. Yan Dong & John Whalley, 2009. "Carbon Motivated Regional Trade Arrangements: Analytics and Simulations," NBER Working Papers 14880, National Bureau of Economic Research, Inc.
  2. Alessandro Antimiani & Valeria Costantini & Chiara Martini & Luca Salvatici, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Departmental Working Papers of Economics - University 'Roma Tre' 0136, Department of Economics - University Roma Tre.
  3. Nicole A. MATHYS & Jaime de MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
  4. Wim Naudé, 2011. "Climate Change and Industrial Policy," Working Papers 2011/03, Maastricht School of Management.
  5. Nicole A. MATHYS & Jaime de MELO, 2011. "The Political Economy of Climate Change Policies: Political Economy Aspects of Climate Change Mitigation Efforts," Working Papers P24, FERDI.
  6. Dong, Yan & Whalley, John, 2012. "Joint non-OPEC carbon taxes and the transfer of OPEC monopoly rents," Journal of Policy Modeling, Elsevier, vol. 34(1), pages 49-63.
  7. Yan Dong & John Whalley, 2009. "A Third Benefit of Joint Non-OPEC Carbon Taxes: Transferring OPEC Monopoly Rent," CESifo Working Paper Series 2741, CESifo Group Munich.

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