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Trade liberalization and the demand for natural resources

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  • Decreux, Yvan
  • Fontagné, Lionel

Abstract

Is free trade harming the environment? This general concern has received particular attention in the case of energy use and emissions. But to what extent would “Buy local” save energy at the global level? Addressing this issue in general equilibrium and at the global level makes it possible to take into account the multifaceted impacts of trade on energy consumption. While transport is energy intensive, international specialisation concentrates production in the most economically efficient producers which can be, or not, more efficient in terms of energy use. Depending on the direction of trade specialisation and on the relative energy efficiency of exporters, more trade can lead to increased or reduced global energy efficiency. We examine this issue using MIRAGE-e and modelling two scenarios of trade liberalisation (Doha-like and full liberalisation). Results validate the hypothesis of enhanced global energy efficiency as trade increases.

Suggested Citation

  • Decreux, Yvan & Fontagné, Lionel, 2013. "Trade liberalization and the demand for natural resources," Conference papers 332333, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332333
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    References listed on IDEAS

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