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Kyoto and the carbon content of trade

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  • Aichele, Rahel
  • Felbermayr, Gabriel

Abstract

A unilateral tax on CO2 emissions may drive up indirect carbon imports from non-committed countries, leading to carbon leakage. Using a gravity model of carbon trade, we analyze the effect of the Kyoto Protocol on the carbon content of bilateral trade. We construct a novel data set of CO2 emissions embodied in bilateral trade flows. Its panel structure allows dealing with endogenous selection of countries into the Protocol. We find strong statistical evidence for Kyoto commitments to affect carbon trade. On average, the Kyoto protocol led to substantial carbon leakage but its total effect on carbon trade was only minor. --

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Bibliographic Info

Paper provided by University of Hohenheim, Center for Research on Innovation and Services (FZID) in its series FZID Discussion Papers with number 10-2010.

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Date of creation: 2010
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Handle: RePEc:zbw:fziddp:102010

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Keywords: Carbon leakage; gravity model; international trade; climate change; embodied emission; input-output analysis;

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References

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Citations

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Cited by:
  1. de Melo, Jaime & Mathys, Nicole Andréa, 2010. "Trade and Climate Change: The Challenges Ahead," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8032, C.E.P.R. Discussion Papers.
  2. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2011. "How well did the Kyoto Protocol work? A dynamic-GMM approach with external instruments," Ibero America Institute for Econ. Research (IAI) Discussion Papers 212, Ibero-America Institute for Economic Research.
  3. Melenberg, B. & Vollebergh, H.R.J. & Dijkgraaf, E., 2011. "Grazing the Commons: Global Carbon Emissions Forever?," Discussion Paper, Tilburg University, Center for Economic Research 2011-020, Tilburg University, Center for Economic Research.
  4. Stratford Douglas & Shuichiro Nishioka, 2010. "International Differences in Emissions Intensity and Emissions Content of Global Trade," Working Papers 10-19, Department of Economics, West Virginia University.
  5. Jaime de MELO, 2012. "Trade in a ‘Green Growth’ Development Strategy Global Scale Issues and Challenges," Working Papers, FERDI P48, FERDI.
  6. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications, The World Bank, number 2283, August.
  7. Misato Sato, 2012. "Embodied carbon in trade: a survey of the empirical literature," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 77, Grantham Research Institute on Climate Change and the Environment.

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