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Climate and international trade policies when emissions affect production possibilities

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  • Kotsogiannis, Christos
  • Woodland, Alan

Abstract

In this paper, we develop a model of international trade and climate change in which emission discharges arising from production have a feedback effect on national production sectors by impacting upon effective factor endowments. With this context, the objectives are, first, to provide a general characterization of Pareto-efficient climate and trade policies and, second, to examine the possibility – starting from non-Pareto-efficient equilibria – for Pareto-improving environmental policies. We provide conditions under which several particular reforms of carbon taxes are welfare improving.

Suggested Citation

  • Kotsogiannis, Christos & Woodland, Alan, 2013. "Climate and international trade policies when emissions affect production possibilities," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 166-184.
  • Handle: RePEc:eee:jeeman:v:66:y:2013:i:2:p:166-184
    DOI: 10.1016/j.jeem.2012.12.005
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    References listed on IDEAS

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    1. Copeland, Brian R. & Taylor, M. Scott, 1999. "Trade, spatial separation, and the environment," Journal of International Economics, Elsevier, vol. 47(1), pages 137-168, February.
    2. 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.
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    7. Turunen-Red, Arja H & Woodland, Alan D, 1991. "Strict Pareto-Improving Multilateral Reforms of Tariffs," Econometrica, Econometric Society, vol. 59(4), pages 1127-1152, July.
    8. James R. Markusen, 1976. "Production and Trade from International Common Property Resources," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 309-319, May.
    9. Tatsuo Hatta, 1977. "A Theory of Piecemeal Policy Recommendations," Review of Economic Studies, Oxford University Press, vol. 44(1), pages 1-21.
    10. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, April.
    11. Arja H. Turunen-Red & Alan D. Woodland, 2004. "Multilateral Reforms of Trade and Environmental Policy," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 321-336, August.
    12. Benarroch, Michael & Thille, Henry, 2001. "Transboundary pollution and the gains from trade," Journal of International Economics, Elsevier, vol. 55(1), pages 139-159, October.
    13. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
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    Cited by:

    1. Keen, Michael & Kotsogiannis, Christos, 2014. "Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments," Journal of International Economics, Elsevier, vol. 94(1), pages 119-128.
    2. repec:aue:wpaper:1509 is not listed on IDEAS
    3. Christos Kotsogiannis & Alan Woodland, 2018. "Climate Change, Strict Pareto Improvements in Welfare and Multilateral Income Transfers," Discussion Papers 2018-04, School of Economics, The University of New South Wales.
    4. Nikos Tsakiris & Panos Hatzipanayotou & Michael S. Michael, 2015. "Emission Permits and Public Pollution Abatement:: Can Decentralized Environmental Policies be Efficient?," CESifo Working Paper Series 5278, CESifo Group Munich.
    5. Nikos Tsakiris & Panos Hatzipanayotou & Michael S. Michael, 2015. "Welfare Ranking of Environmental Policies in the Presence of Capital Mobility and Cross-border Pollution," DEOS Working Papers 1513, Athens University of Economics and Business.

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