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Trade Sanctions, Financial Transfers and BRIC's Participation in Global Climate Change Negotiations

Author

Listed:
  • Huifang Tian
  • John Whalley

Abstract

Countries can reduce global emissions by reducing own consumption since they are linked to the total value of consumption world wide. Two effects are at issue: a utility loss from forgone consumption and a utility gain from lowered temperature change. It is thus unclear whether own country emissions reductions are in the self interest; typically they are not for small countries, but may be for larger countries. Here are investigate the incentives for individual large population low wage rapidly growing countries in the BRIC group (Brazil, Russia, India, China) and the groups of countries as a sub-global coalition. We also assess what level of other countries’ trade measures linked to non participation is needed to induce compliance as an all or nothing discrete choice. We capture induced changes in the global trade equilibrium in our analysis, as well as participation linked to financial transfers. Our results suggest that only very high tariffs over a hundred percent by all other countries, or even higher tariffs by the OECD alone, could induce participation by BRIC countries, especially when the country is a net exporter. Equally, large financial transfers would be needed.

Suggested Citation

  • Huifang Tian & John Whalley, 2009. "Trade Sanctions, Financial Transfers and BRIC's Participation in Global Climate Change Negotiations," CESifo Working Paper Series 2698, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2698
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp2698.pdf
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    References listed on IDEAS

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    1. 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 678-684, Part I Se.
    2. Huifang Tian & John Whalley, 2008. "China's Participation in Global Environmental Negotiations," NBER Working Papers 14460, National Bureau of Economic Research, Inc.
    3. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, January.
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    6. Uzawa,Hirofumi, 2009. "Economic Theory and Global Warming," Cambridge Books, Cambridge University Press, number 9780521066594, December.
    7. 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.
    8. Cai, Yuezhou & Riezman, Raymond & Whalley, John, 2013. "International trade and the negotiability of global climate change agreements," Economic Modelling, Elsevier, vol. 33(C), pages 421-427.
    9. 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.
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    Citations

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    Cited by:

    1. Huifang Tian & John Whalley, 2010. "The Potential Global and Developing Country Impacts of Alternative Emission Cuts and Accompanying Mechanisms for the Post Copenhagen Process," NBER Working Papers 16090, National Bureau of Economic Research, Inc.
    2. Huifang Tian & Xiaojun Shi & John Whalley, 2012. "Cross Country Fairness Considerations and Country Implications of Alternative Approaches to a Global Emission Reduction Regime," NBER Working Papers 18443, National Bureau of Economic Research, Inc.
    3. Huifang Tian & John Whalley, 2015. "Developing Countries And The Unfccc Process: Some Simulations From An Armington Extended Climate Model," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-22, November.
    4. You, Jing, 2013. "China's challenge for decarbonized growth: Forecasts from energy demand models," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 652-668.
    5. David Ralston & Carolyn Egri & Charlotte Karam & Irina Naoumova & Narasimhan Srinivasan & Tania Casado & Yongjuan Li & Ruth Alas, 2015. "The triple-bottom-line of corporate responsibility: Assessing the attitudes of present and future business professionals across the BRICs," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 145-179, March.

    More about this item

    Keywords

    trade sanctions; financial transfers; global emissions; climate change;

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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