Environmental Policy and International Trade
AbstractThis paper explores the empirical link between environmental policy and international trade. Using an estimated global simulation model, the paper focusses on the extent to which international trade flows are redirected as a result of unilateral versus multilateral taxes on the emission of carbon dioxide. We find that a carbon tax in the United States produces little redirection of trade either in the short run or the long run because electric power generation and local transportation are by far the most carbon intensive activities and both are largely non-traded. We also illustrate the importance of the assumptions about the way in which the revenue from the carbon tax is recycled. We find that the revenue recycling assumption has important macroeconomic implications for saving and investment balances and therefore for the adjustment of trade flows.
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Bibliographic InfoPaper provided by Brookings Institution - Working Papers in its series Papers with number 117.
Length: 29 pages
Date of creation: 1995
Date of revision:
ENVIRONMENT; INTERNATIONAL TRADE; POLLUTION; TAXES;
Other versions of this item:
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
- F10 - International Economics - - Trade - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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