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Trade liberalization and the demand for natural resources

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  • Decreux, Yvan
  • Fontagné, Lionel

Abstract

Is free trade harming the environment? This general concern has received particular attention in the case of energy use and emissions. But to what extent would “Buy local” save energy at the global level? Addressing this issue in general equilibrium and at the global level makes it possible to take into account the multifaceted impacts of trade on energy consumption. While transport is energy intensive, international specialisation concentrates production in the most economically efficient producers which can be, or not, more efficient in terms of energy use. Depending on the direction of trade specialisation and on the relative energy efficiency of exporters, more trade can lead to increased or reduced global energy efficiency. We examine this issue using MIRAGE-e and modelling two scenarios of trade liberalisation (Doha-like and full liberalisation). Results validate the hypothesis of enhanced global energy efficiency as trade increases.

Suggested Citation

  • Decreux, Yvan & Fontagné, Lionel, 2013. "Trade liberalization and the demand for natural resources," Conference papers 332333, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332333
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    File URL: https://ageconsearch.umn.edu/record/332333/files/6563.pdf
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    References listed on IDEAS

    as
    1. Yvan Decreux & Lionel Fontagné, 2011. "Economic Impact of Potential Outcome of the DDA," Working Papers 2011-23, CEPII research center.
    2. Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2012. "The Great Shift : Macroeconomic projections For the World Economy at the 2050 Horizon," Working Papers hal-00962464, HAL.
    3. Roberto Roson & Dominique Van der Mensbrugghe, 2012. "Climate change and economic growth: impacts and interactions," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 270-285.
    4. Juan Delgado, 2007. "Why Europe is not carbon competitive," Policy Briefs 33, Bruegel.
    5. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    6. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    7. Amador, João, 2012. "Energy content in manufacturing exports: A cross-country analysis," Energy Economics, Elsevier, vol. 34(4), pages 1074-1081.
    8. Yvan Decreux & Hugo Valin, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 2007-15, CEPII research center.
    9. Hillard G. Huntington, 2010. "Structural Change and U.S. Energy Use: Recent Patterns," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 25-40.
    10. Roberto Roson & Dominique Van der Mensbrugghe, 2012. "Climate change and economic growth: impacts and interactions," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 270-285.
    Full references (including those not matched with items on IDEAS)

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