Trade sanctions, financial transfers and BRIC participation in global climate change negotiations
Two effects are at issue in evaluating country incentives to participate in global carbon emission initiatives: a utility loss from reduced consumption due to reduced use of fossil fuels and a gain from lowered temperature change. The latter accrues to all countries. Own country emissions reductions are typically not in the self interest of countries and hence countries will not participate in global climate negotiations, unless the perceived damage from climate change is very large and much larger than damage estimates in the Stern review. We use Stern based damage estimates and investigate how the incentives for large population low wage rapidly growing countries in the BRIC group (Brazil, Russia, India, China) to participate in global climate change negotiations both as a sub-global coalition and individually can be affected by penalties (tariffs) inflicted or financial transfers made to them by the OECD. We assess what levels of other country trade measures linked to non-participation are needed to induce compliance as an all or nothing discrete choice. We also analyze participation linked to financial transfers. We use a general equilibrium model calibrated to a 2006-2056 base case, and capture induced changes in the global trade equilibrium in our analyses. Our results suggest that only very high tariffs of over a hundred percent by all other countries, or even higher tariffs by the OECD alone, could induce participation by BRIC countries. Equally, large financial transfers would be needed.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Liang, Qiao-Mei & Fan, Ying & Wei, Yi-Ming, 2007. "Carbon taxation policy in China: How to protect energy- and trade-intensive sectors?," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 311-333.
- Uzawa,Hirofumi, 2009.
"Economic Theory and Global Warming,"
Cambridge University Press, number 9780521066594, Junio.
- Cai, Yuezhou & Riezman, Raymond & Whalley, John, 2013.
"International trade and the negotiability of global climate change agreements,"
Elsevier, vol. 33(C), pages 421-427.
- Yuezhou Cai & Raymond Riezman & John Whalley, 2009. "International Trade and the Negotiability of Global Climate Change Agreements," NBER Working Papers 14711, National Bureau of Economic Research, Inc.
- Herbert E. Scarf, 1965. "The Core of an N Person Game," Cowles Foundation Discussion Papers 182R, Cowles Foundation for Research in Economics, Yale University.
- Hirofumi Uzawa, 1999. "Global warming as a cooperative game," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 2(1), pages 1-37, March.
- Shapley, Lloyd S & Shubik, Martin, 1969. "On the Core of an Economic System with Externalities," American Economic Review, American Economic Association, vol. 59(4), pages 678-84, Part I Se.
- John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, March.
- Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 703-724, September.
- Partha Dasgupta, 2008. "Discounting climate change," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 141-169, December.
- Huifang Tian & John Whalley, 2008. "China's Participation in Global Environmental Negotiations," NBER Working Papers 14460, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:32:y::i:1:p:47-63. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.