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Carbon, Trade Policy and Carbon Free Trade Areas

Author

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  • Yan Dong
  • John Whalley

Abstract

Abstract This paper discusses both the potential contribution that trade policy initiatives can make towards the achievement of significant global carbon emissions reduction and the potential impacts of proposals now circulating for carbon reduction motivated geographical trade arrangements, including carbon-free trade areas. We first suggest that trade policy is likely to be a relatively minor consideration in climate change containment. The dominant influence on carbon emissions globally for the next several decades will be growth more than trade and its composition, and in turn, the size of trade seemingly matters more than its composition given differences in emission intensity between tradables and non-tradables. We then note that differences in emissions intensity across countries are larger than across products or sectors and so issues of country discrimination in trade policy (and violations of MFN) arise. Copyright 2010 Blackwell Publishing Ltd.

Suggested Citation

  • Yan Dong & John Whalley, 2010. "Carbon, Trade Policy and Carbon Free Trade Areas," The World Economy, Wiley Blackwell, vol. 33(9), pages 1073-1094, September.
  • Handle: RePEc:bla:worlde:v:33:y:2010:i:9:p:1073-1094
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    References listed on IDEAS

    as
    1. Ben Lockwood & John Whalley, 2010. "Carbon-motivated Border Tax Adjustments: Old Wine in Green Bottles?," The World Economy, Wiley Blackwell, vol. 33(6), pages 810-819, June.
    2. Piggott, John & Whalley, John & Wigle, Randall, 1993. "How large are the incentives to join subglobal carbon-reduction initiatives?," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 473-490.
    3. Whalley, John, 1979. "Uniform domestic tax rates, trade distortions and economic integration," Journal of Public Economics, Elsevier, vol. 11(2), pages 213-221, March.
    4. John Whalley, 2008. "Recent Regional Agreements: Why So Many, Why So Much Variance in Form, Why Coming So Fast, and Where Are They Headed?," The World Economy, Wiley Blackwell, vol. 31(4), pages 517-532, April.
    5. Dong, Yan & Whalley, John, 2011. "Carbon motivated regional trade arrangements: Analytics and simulations," Economic Modelling, Elsevier, vol. 28(6), pages 2783-2792.
    6. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
    7. Nadim Ahmad & Andrew Wyckoff, 2003. "Carbon Dioxide Emissions Embodied in International Trade of Goods," OECD Science, Technology and Industry Working Papers 2003/15, OECD Publishing.
    8. Gary Clyde Hufbauer & Carol Gabyzon, 1996. "Fundamental Tax Reform and Border Tax Adjustments," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa43, February.
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    Citations

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    Cited by:

    1. Nicole A. MATHYS & Jaime DE MELO, 2011. "The Political Economy of Climate Change Policies: Political Economy Aspects of Climate Change Mitigation Efforts," Working Papers P24, FERDI.
    2. Nicole A. MATHYS & Jaime DE MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    3. Wim Naudé, 2011. "Climate Change and Industrial Policy," Sustainability, MDPI, Open Access Journal, vol. 3(7), pages 1-19, July.
    4. Liu, Liwei & Chen, Chuxiang & Zhao, Yufei & Zhao, Erdong, 2015. "China׳s carbon-emissions trading: Overview, challenges and future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 254-266.
    5. Dong, Yan & Whalley, John, 2011. "Carbon motivated regional trade arrangements: Analytics and simulations," Economic Modelling, Elsevier, vol. 28(6), pages 2783-2792.
    6. Siriwardana, Mahinda, 2014. "Australia’s new Free Trade Agreements with Japan and South Korea: Potential Impacts on the Resources and Agricultural Sectors and their Environmental Implications," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 187405, New Zealand Agricultural and Resource Economics Society.
    7. Dong, Yan & Whalley, John, 2012. "Joint non-OPEC carbon taxes and the transfer of OPEC monopoly rents," Journal of Policy Modeling, Elsevier, vol. 34(1), pages 49-63.
    8. Saibal Kar & Devleena Majumdar, 2016. "MFN Tariff Rates and Carbon Emission: Evidence from Lower-Middle-Income Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 493-510, July.
    9. Alessandro Antimiani & Valeria Costantini & Chiara Martini & Luca Salvatici, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Departmental Working Papers of Economics - University 'Roma Tre' 0136, Department of Economics - University Roma Tre.
    10. repec:gam:jsusta:v:9:y:2017:i:6:p:1028-:d:101610 is not listed on IDEAS
    11. Antimiani, Alessandro & Costantini, Valeria & Martini, Chiara & Salvatici, Luca & Tommasino, Maria Cristina, 2013. "Assessing alternative solutions to carbon leakage," Energy Economics, Elsevier, vol. 36(C), pages 299-311.
    12. Yan Dong & John Whalley, 2009. "A Third Benefit of Joint Non-OPEC Carbon Taxes: Transferring OPEC Monopoly Rent," CESifo Working Paper Series 2741, CESifo Group Munich.
    13. Jaime de Melo & Nicole A. Mathys, 2012. "Concilier les politiques commerciales et les politiques climatiques," Revue d’économie du développement, De Boeck Université, vol. 20(2), pages 57-81.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F10 - International Economics - - Trade - - - General

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