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Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade

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  • Rahel Aichele

    ()

  • Gabriel J. Felbermayr

Abstract

Has the Kyoto Protocol induced carbon leakage? We conduct the first empirical ex-post evaluation of the Protocol. We derive a theoretical gravity equation for the CO2 content of trade, which accounts for intermediate inputs, both domestic and imported. The structure of our new panel database of the carbon content of sectoral bilateral trade flows allows controlling for the endogenous selection of countries into the Kyoto Protocol. Binding commitments under Kyoto have increased committed countries’ embodied carbon imports from non-committed countries by around 8% and the emission intensity of their imports by about 3%. Hence, Kyoto has indeed led to leakage.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-11/cesifo1_wp3661.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3661.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3661

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Related research

Keywords: carbon leakage; CO2 content of trade; gravity equation; Kyoto Protocol;

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References

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  1. Gianmarco I.P. Ottaviano & Kristian Behrens & Andrea R. Lamorgese & Takatoshi Tabuchi, 2009. "Beyond the Home Market Effect: Market Size and Specialization in a Multi-Country World," Working Papers 2009.119, Fondazione Eni Enrico Mattei.
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  7. Aichele, Rahel & Felbermayr, Gabriel, 2012. "Kyoto and the carbon footprint of nations," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 336-354.
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  18. Ralph Ossa, 2011. "A “New Trade” Theory of GATT/WTO Negotiations," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 122 - 152.
  19. Satoshi Nakano & Asako Okamura & Norihisa Sakurai & Masayuki Suzuki & Yoshiaki Tojo & Norihiko Yamano, 2009. "The Measurement of CO2 Embodiments in International Trade: Evidence from the Harmonised Input-Output and Bilateral Trade Database," OECD Science, Technology and Industry Working Papers 2009/3, OECD Publishing.
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  1. Exportschlager Treibhausgas
    by faz-jpen in Fazit on 2014-02-05 15:33:30
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Cited by:
  1. Rahel Aichele & Gabriel Felbermayr, 2013. "Estimating the Effects of Kyoto on Bilateral Trade Flows Using Matching Econometrics," The World Economy, Wiley Blackwell, vol. 36(3), pages 303-330, 03.
  2. Rahel Aichele & Gabriel Felbermayr, 2011. "Internationaler Handel und Carbon Leakage," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 64(23), pages 26-30, December.

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