Can Global De-Carbonization Inhibit Developing Country Industrialization?
AbstractMost economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. We depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports. Second, we decompose the impact of a modest agreement on emissions reductions—17 percent relative to 2005 levels by 2020 for industrial countries and 17 percent relative to business-as-usual for developing countries—into three components: the change in the price of carbon due to each country's emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public). Manufacturing output and exports in low carbon intensity countries such as Brazil are less affected. In contrast, in high carbon intensity countries, such as China and India, even a modest agreement depresses manufacturing output by 3–3.5 percent and manufacturing exports by 5.5–7 percent. The increase in the carbon price induced by emissions tradability hurts manufacturing output most while the real exchange rate effects of transfers hurt exports most. Copyright 2012, Oxford University Press.
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Bibliographic InfoArticle provided by World Bank Group in its journal The World Bank Economic Review.
Volume (Year): 26 (2012)
Issue (Month): 2 ()
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Other versions of this item:
- Aaditya Mattoo & Arvind Subramanian & Dominique van der Mensbrugghe & Jianwu He, 2009. "Can Global De-Carbonization Inhibit Developing-Country Industrialization?," Working Papers 188, Center for Global Development.
- Mattoo, Aaditya & Subramanian, Arvind & van der Mensbrugghe, Dominique & He, Jianwu, 2009. "Can global de-carbonization inhibit developing country industrialization ?," Policy Research Working Paper Series 5121, The World Bank.
- Aaditya Mattoo, 2010. "Can Global De-Carbonization Inhibit Developing Country Industrialization?," Working Papers id:2364, eSocialSciences.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F18 - International Economics - - Trade - - - Trade and Environment
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
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