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Towards a more effective climate policy on international trade

Author

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  • Erik Dietzenbacher

    (University of Groningen, Faculty of Economics and Business, PO Box 800)

  • Ignacio Cazcarro

    (University of Zaragoza
    Scientific Park of the University of the Basque Country (UPV/EHU), Edificio Sede 1, Planta 1ª | Parque Científico de UPV/EHU)

  • Iñaki Arto

    (Scientific Park of the University of the Basque Country (UPV/EHU), Edificio Sede 1, Planta 1ª | Parque Científico de UPV/EHU)

Abstract

In the literature on the attribution of responsibilities for greenhouse gas emissions, two accounting methods have been widely discussed: production-based accounting (PBA) and consumption-based accounting (CBA). It has been argued that an accounting framework for attributing responsibilities should credit actions contributing to reduce global emissions and should penalize actions increasing them. Neither PBA nor CBA satisfy this principle. Adapting classical Ricardian trade theory, we consider ex post measurement and propose a scheme for assigning credits and penalties. Their size is determined by how much CO2 emissions are saved globally due to trade. This leads to the emission responsibility allotment (ERA) for assigning responsibilities. We illustrate the differences between ERA and PBA and CBA by comparing their results for 41 countries and regions between 1995–2009. The Paris Agreement (COP21) proposed new market mechanisms; we argue that ERA is well suited to measure and evaluate their overall mitigation impact.

Suggested Citation

  • Erik Dietzenbacher & Ignacio Cazcarro & Iñaki Arto, 2020. "Towards a more effective climate policy on international trade," Nature Communications, Nature, vol. 11(1), pages 1-11, December.
    • Handle: RePEc:nat:natcom:v:11:y:2020:i:1:d:10.1038_s41467-020-14837-5
    DOI: 10.1038/s41467-020-14837-5
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    Cited by:

    1. Maeno, Keitaro, 2023. "Identifying critical sectors in the restructuring of low-carbon global supply chains," Energy Economics, Elsevier, vol. 127(PA).
    2. Golinucci, Nicolò & Tonini, Francesco & Rocco, Matteo Vincenzo & Colombo, Emanuela, 2023. "Towards BitCO2, an individual consumption-based carbon emission reduction mechanism," Energy Policy, Elsevier, vol. 183(C).
    3. Wu, Ran & Ma, Tao & Schröder, Enno, 2022. "The contribution of trade to production-Based carbon dioxide emissions," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 391-406.
    4. Huang, Rui & Lv, Guonian, 2021. "The climate economic effect of technology spillover," Energy Policy, Elsevier, vol. 159(C).
    5. He, Kehan & Mi, Zhifu & Coffman, D'Maris & Guan, Dabo, 2022. "Using a linear regression approach to sequential interindustry model for time-lagged economic impact analysis," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 399-406.
    6. Jingke, Hong & Chenyu, Wang & Chang-Richards, Alice & Jingxiao, Zhang & Qiping, Geoffrey Shen & Bei, Qiao, 2022. "A spatiotemporal analysis of energy use pathways in the construction industry: A study of China," Energy, Elsevier, vol. 239(PC).
    7. Huang, He & Hong, Jingke & Wang, Xianzhu & Chang-Richards, Alice & Zhang, Jingxiao & Qiao, Bei, 2022. "A spatiotemporal analysis of the driving forces behind the energy interactions of the Chinese economy: Evidence from static and dynamic perspectives," Energy, Elsevier, vol. 239(PB).

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