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Is Emission Trading Beneficial?

Author

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  • JOTA ISHIKAWA
  • KAZUHARU KIYONO
  • MORIHIRO YOMOGIDA

Abstract

We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding South's production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries.
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Suggested Citation

  • Jota Ishikawa & Kazuharu Kiyono & Morihiro Yomogida, 2012. "Is Emission Trading Beneficial?," The Japanese Economic Review, Japanese Economic Association, vol. 63(2), pages 185-203, June.
    • Handle: RePEc:bla:jecrev:v:63:y:2012:i:2:p:185-203
    DOI: j.1468-5876.2012.00570.x
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should there be international trade in pollution rights?
      by Economic Logician in Economic Logic on 2011-05-02 19:50:00

    Citations

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    Cited by:

    1. Keisaku Higashida & Jota Ishikawa & Nori Tarui, 2025. "Carrying Carbon? Negative and Positive Carbon Leakage With International Transport," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 34(4), pages 971-990, November.
    2. Haitao CHENG & Jota ISHIKAWA, 2021. "Carbon Tax and Border Tax Adjustments with Technology and Location Choices," Discussion papers 21030, Research Institute of Economy, Trade and Industry (RIETI).
    3. Xiao Chen & Alan Woodland, 2013. "International trade and climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 381-413, June.
    4. Cheng, Haitao, 2024. "Domestic versus international emissions trading with capital mobility," Resource and Energy Economics, Elsevier, vol. 77(C).
    5. Shiro Takeda & Toshi H. Arimura & Makoto Sugino, 2019. "Labor Market Distortions and Welfare-Decreasing International Emissions Trading," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 271-293, September.
    6. Kazuharu Kiyono & Jota Ishikawa, 2013. "Environmental Management Policy Under International Carbon Leakage," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 1057-1083, August.
    7. Jota Ishikawa & Kazuharu Kiyono & Morihiro Yomogida, 2024. "Emissions Trading and International Trade," Contributions to Economics, in: Sugata Marjit & Biswajit Mandal (ed.), International Trade, Resource Mobility and Adjustments in a Changing World, chapter 0, pages 147-175, Springer.
    8. Jota Ishikawa & Toshihiro Okubo, 2017. "Greenhouse-Gas Emission Controls and Firm Locations in North–South Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 637-660, August.
    9. Yoshiaki Nakada, 2017. "The effects of energy and commodity prices on commodity output in a three-factor, two-good general equilibrium trade model," Papers 1711.10096, arXiv.org, revised Nov 2018.

    More about this item

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment

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