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Estimating the Effects of Kyoto on Bilateral Trade Flows Using Matching Econometrics

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  • Rahel Aichele
  • Gabriel Felbermayr

Abstract

Many Kyoto countries fear a loss of competitiveness due to unilateral climate policyefforts; policymakers therefore call for carbon-related border tax adjustments. With thispaper we attempt to estimate the treatment effect of Kyoto commitment on bilateralexport flows using regression-adjusted differences-in-differences matching techniques.The gravity and international environmental agreement formation literatures provideguidelines for the choice of matching variables. We find that Kyoto countries' exportsare reduced by 13–14% due to Kyoto commitment. Trade effects are largest in energyintensive,homogeneous industries such as iron and steel, non-ferrous metals, organicand inorganic chemicals but also in machinery and equipment.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 36 (2013)
Issue (Month): 3 (03)
Pages: 303-330

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Handle: RePEc:bla:worlde:v:36:y:2013:i:3:p:303-330

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Cited by:
  1. Somlanare Romuald KINDA & Pascale COMBES MOTEL & Jean-Louis COMBES, 2014. "Do Environmental Policies Hurt Trade Performance?," Working Papers 201404, CERDI.
  2. Rahel Aichele & Gabriel Felbermayr & Inga Heiland, 2014. "EEG und internationaler Wettbewerb: Ist die besondere Ausgleichsregelung haltbar?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 67(02), pages 23-29, 01.

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