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The impact of climate legislation on trade-related carbon emissions 1996–2018

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  • Eskander, Shaikh M.S.U.
  • Fankhauser, Sam

Abstract

We analyse the international impact on carbon emissions from national climate legislation in 111 countries over 1996–2018. We estimate trade-related carbon leakage, or net carbon imports, as the difference between consumption and production emissions. Legislation has had a significant negative and roughly similar impact on both consumption and production emissions. The net impact on trade-related emissions is therefore not statistically significant, neither in the short term (laws passed in the last 3 years) nor the long term (laws older than 3 years). We find a significant negative long-term impact on domestic emissions from laws passed by trade partners. This latter specification corresponds to the traditional definition of carbon leakage. Overall, we conclude that there has been no detrimental effect of climate legislation on international emissions.

Suggested Citation

  • Eskander, Shaikh M.S.U. & Fankhauser, Sam, 2023. "The impact of climate legislation on trade-related carbon emissions 1996–2018," LSE Research Online Documents on Economics 118331, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118331
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    More about this item

    Keywords

    carbon leakage; climate change legislation; climate policy; consumption emissions; production emissions; technology spillovers;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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