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Trade Policy to Control Climate Change: Does the Stick Beat the Carrot?

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  • Susanne Dröge
  • Claudia Kemfert

Abstract

Trade and climate change policies are closely related. We consider in a general equilibrium model the role of trade restrictions and energy-efficient technology transfers for the stabilisation of the Kyoto climate coalition. We find that a trade restriction policy leads to economic losses for a large number of countries and would not be suited to convince the United States to return to the Kyoto Protocol. The technology transaction via trade, however, induces major positive economic effects for participating economies as well as considerable reductions in emissions. Therefore, the claim that trade restrictions should be used as a stick to force countries to cooperate in climate change control is not supported in this study. Rather, the benefits of R&D spill-overs should be used as an incentive to promote participation. Internationaler Handel und Klimapolitik sind eng miteinander verknüpft. Mithilfe eines allgemeinen Gleichgewichtsmodells untersuchen wir, welche Rolle Handelseinschränkungen sowie Transfers von energieeffizienten technischen Innovationen für die Stabilisierung der Klimapolitik unter dem Kyoto-Protokoll spielen können. Handelseinschränkungen führen zu einer Verschlechterung der Handelsbilanz für die Mehrzahl der Länder und Regionen weltweit. Sie sind daher nicht geeignet, die USA zu einer Rückkehr in die Klimakoalition zu bewegen. Der Transfer neuer Technologien führt hingegen zu positiven ökonomischen Effekten in den beteiligten Ländern und darüber hinaus reduziert er auch stärker die Emissionen. Die Forderung, Klimaschutz durch Handelsrestriktionen zu erzwingen, kann somit nicht unterstützt werden. Vielmehr sollten technologische Kooperationen als Anreiz eingesetzt werden.

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Bibliographic Info

Article provided by DIW Berlin, German Institute for Economic Research in its journal Vierteljahrshefte zur Wirtschaftsforschung.

Volume (Year): 74 (2005)
Issue (Month): 2 ()
Pages: 235-248

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Handle: RePEc:diw:diwvjh:74-2-10

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  1. Frank Biermann & Rainer Brohm, 2005. "Border Adjustments on Energy Taxes: A Possible Tool for European Policymakers in Implementing the Kyoto Protocol?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(2), pages 249-258.
  2. Brewer, Thomas L & Young, Stephen, 1998. "Investment Issues at the WTO: The Architecture of Rules and the Settlement of Disputes," Journal of International Economic Law, Oxford University Press, Oxford University Press, vol. 1(3), pages 457-70, September.
  3. Kemfert, Claudia, 2004. "Climate coalitions and international trade: assessment of cooperation incentives by issue linkage," Energy Policy, Elsevier, Elsevier, vol. 32(4), pages 455-465, March.
  4. Dr Ge, Susanne & Trabold, Harald & Biermann, Frank & B Hm, Fr D Ric & Brohm, Rainer, 2004. "National climate change policies and WTO law: a case study of Germany's new policies," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 3(02), pages 161-187, July.
  5. Georg Muller-Furstenberger & Martin Wagner & Benito Muller, 2005. "Exploring the Carbon Kuznets Hypothesis," Others, EconWPA 0506009, EconWPA.
  6. Marzio Galeotti & Claudia Kemfert, 2004. "Interactions between Climate and Trade Policies: A Survey," Working Papers, Fondazione Eni Enrico Mattei 2004.88, Fondazione Eni Enrico Mattei.
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Cited by:
  1. Yan Dong & John Walley, 2012. "How Large Are The Impacts Of Carbon Motivated Border Tax Adjustments?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1250001-1-1.
  2. Ben Lockwood & John Whalley, 2010. "Carbon-motivated Border Tax Adjustments: Old Wine in Green Bottles?," The World Economy, Wiley Blackwell, vol. 33(6), pages 810-819, 06.
  3. Fabio Sferra & Massimo Tavoni, 2013. "Endogenous Participation in a Partial Climate Agreement with Open Entry: A Numerical Assessment," Working Papers, Fondazione Eni Enrico Mattei 2013.60, Fondazione Eni Enrico Mattei.
  4. John Whalley, 2009. "On the effectiveness of carbon-motivated border tax adjustments," Working Papers, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada. 6309, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..

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