IDEAS home Printed from https://ideas.repec.org/p/enp/wpaper/eprg1802.html
   My bibliography  Save this paper

International spillovers and carbon pricing Policies

Author

Listed:
  • Geoffroy Dolphin

    (Cambridge Judge Business School and Energy Policy Research Group, University of Cambridge)

  • Michael G. Pollitt

    (Cambridge Judge Business School and Energy Policy Research Group, University of Cambridge)

Abstract

Globally coordinated climate action has resulted in sub-optimal emissions reductions and unilateral (second-best) climate policies have so far provided the bulk of emissions reductions. This paper argues that the development of new unilateral carbon pricing policies was fostered by international signalling and technological spillover effects. The strength of both effects hinges, for each jurisdiction, on trade relations with other CO2-abating jurisdictions. We provide a stylised theoretical discussion in support of our proposition and investigate it using data on a panel of 121national jurisdictions over the period 1990-2014. Results show a strong positive association between import-weighted exposure to CO2-pricing partners and domestic environmental policy. The analysis also supports the technological spillover channel: trade-weighted installed capacity of wind and solar energy seems to prompt implementation of and more stringent carbon pricing policies.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Geoffroy Dolphin & Michael G. Pollitt, 2018. "International spillovers and carbon pricing Policies," Working Papers EPRG 1802, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1802
    as

    Download full text from publisher

    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/12/eprg-wp1802.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    2. Dechezlepretre, Antoine & Glachant, Matthieu & Hascic, Ivan & Johnstone, Nick & Meniere, Yann, 2009. "Invention and Transfer of Climate Change Mitigation Technologies on a Global Scale: A Study Drawing on Patent Data," Sustainable Development Papers 54361, Fondazione Eni Enrico Mattei (FEEM).
    3. William Brock & M. Taylor, 2010. "The Green Solow model," Journal of Economic Growth, Springer, vol. 15(2), pages 127-153, June.
    4. Nicholas Bloom & Mark Schankerman & John Van Reenen, 2013. "Identifying Technology Spillovers and Product Market Rivalry," Econometrica, Econometric Society, vol. 81(4), pages 1347-1393, July.
    5. Samuel Fankhauser & Caterina Gennaioli & Murray Collins, 2016. "Do international factors influence the passage of climate change legislation?," Climate Policy, Taylor & Francis Journals, vol. 16(3), pages 318-331, April.
    6. Falvey, Rod & Foster, Neil & Greenaway, David, 2004. "Imports, exports, knowledge spillovers and growth," Economics Letters, Elsevier, vol. 85(2), pages 209-213, November.
    7. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    8. Copeland, Brian R. & Taylor, M. Scott, 2005. "Free trade and global warming: a trade theory view of the Kyoto protocol," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 205-234, March.
    9. Mark Funk, 2001. "Trade and International R&D Spillovers among OECD Countries," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 725-736, January.
    10. Parrado, Ramiro & De Cian, Enrica, 2014. "Technology spillovers embodied in international trade: Intertemporal, regional and sectoral effects in a global CGE framework," Energy Economics, Elsevier, vol. 41(C), pages 76-89.
    11. de la Tour, Arnaud & Glachant, Matthieu & Ménière, Yann, 2011. "Innovation and international technology transfer: The case of the Chinese photovoltaic industry," Energy Policy, Elsevier, vol. 39(2), pages 761-770, February.
    12. repec:clg:wpaper:2008-02 is not listed on IDEAS
    13. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
    14. Fracasso, Andrea & Vittucci Marzetti, Giuseppe, 2015. "International trade and R&D spillovers," Journal of International Economics, Elsevier, vol. 96(1), pages 138-149.
    15. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    16. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    17. Antoine Dechezleprêtre & Matthieu Glachant & Ivan Haščič & Nick Johnstone & Yann Ménière, 2011. "Invention and Transfer of Climate Change--Mitigation Technologies: A Global Analysis," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 109-130, Winter.
    18. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    19. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, February.
    20. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    21. Perkins, Richard & Neumayer, Eric, 2012. "Does the ‘California effect’ operate across borders? trading- and investing-up in automobile emission standards," LSE Research Online Documents on Economics 42097, London School of Economics and Political Science, LSE Library.
    22. Geoffroy Dolphin & Michael G Pollitt & David M Newbery, 2020. "The political economy of carbon pricing: a panel analysis," Oxford Economic Papers, Oxford University Press, vol. 72(2), pages 472-500.
    23. James A. Tobey, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209, May.
    24. Arik Levinson & M. Scott Taylor, 2008. "Unmasking The Pollution Haven Effect," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 223-254, February.
    25. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    26. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    27. Elmar Kriegler & John Weyant & Geoffrey Blanford & Volker Krey & Leon Clarke & Jae Edmonds & Allen Fawcett & Gunnar Luderer & Keywan Riahi & Richard Richels & Steven Rose & Massimo Tavoni & Detlef Vuu, 2014. "The role of technology for achieving climate policy objectives: overview of the EMF 27 study on global technology and climate policy strategies," Climatic Change, Springer, vol. 123(3), pages 353-367, April.
    28. Simmons, Beth A. & Elkins, Zachary, 2004. "The Globalization of Liberalization: Policy Diffusion in the International Political Economy," American Political Science Review, Cambridge University Press, vol. 98(1), pages 171-189, February.
    29. Babiker, Mustafa H., 2005. "Climate change policy, market structure, and carbon leakage," Journal of International Economics, Elsevier, vol. 65(2), pages 421-445, March.
    30. Yann Ménière & Antoine Dechezleprêtre & Matthieu Glachant & Ivan Hascic & N. Johnstone, 2011. "Invention and transfer of climate change mitigation technologies: a study drawing on patent data," Post-Print hal-00869795, HAL.
    31. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    32. Tobey, James A., 1990. "Effects of Domestic Environmental Policy on Patterns of International Trade," 1990: The Environment, Government Policies, and International Trade Meeting, December 1990, San Diego, CA 50878, International Agricultural Trade Research Consortium.
    33. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dolphin, Geoffroy & Pollitt, Michael G., 2021. "The International Diffusion of Climate Policy: Theory and Evidence," RFF Working Paper Series 21-23, Resources for the Future.
    2. Xiao Chen & Alan Woodland, 2013. "International trade and climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 381-413, June.
    3. Dhimitri Qirjo & Razvan Pascalau, 2019. "The Role of TTIP on the Environment," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1262-1285, April.
    4. Qirjo, Dhimitri & Pascalau, Razvan & Krichevskiy, Dmitriy, 2019. "CETA and Air Pollution," MPRA Paper 95608, University Library of Munich, Germany.
    5. van den Bijgaart, Inge, 2017. "The unilateral implementation of a sustainable growth path with directed technical change," European Economic Review, Elsevier, vol. 91(C), pages 305-327.
    6. Suárez-Varela, Marta & Rodríguez-Crespo, Ernesto, 2022. "Is dirty trade concentrating in more polluting countries? Evidence from Africa," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 728-744.
    7. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    8. Jeffrey A. Frankel, 2003. "The Environment and Globalization," NBER Working Papers 10090, National Bureau of Economic Research, Inc.
    9. Haixiao Huang, Walter C. Labys, 2002. "Environment and trade: a review of issues and methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(1/2), pages 100-160.
    10. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.
    11. Wang, Jing & Wan, Guanghua & Wang, Chen, 2019. "Participation in GVCs and CO2 emissions," Energy Economics, Elsevier, vol. 84(C).
    12. Tang, John P., 2015. "Pollution havens and the trade in toxic chemicals: Evidence from U.S. trade flows," Ecological Economics, Elsevier, vol. 112(C), pages 150-160.
    13. Ajayi, Patricia & Ogunrinola, Adedeji, 2020. "Growth, Trade Openness and Environmental Degradation in Nigeria," MPRA Paper 100713, University Library of Munich, Germany.
    14. Helen Tammela Naughton, 2010. "Globalization and Emissions in Europe," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(2), pages 503-519, December.
    15. Naegele, Helene & Zaklan, Aleksandar, 2019. "Does the EU ETS cause carbon leakage in European manufacturing?," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 125-147.
    16. Rahel Aichele, 2013. "Trade, Climate Policy and Carbon Leakage - Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 49.
    17. Tang, John P., 2015. "Pollution havens and the trade in toxic chemicals: Evidence from U.S. trade flows," Ecological Economics, Elsevier, vol. 112(C), pages 150-160.
    18. Koch, Nicolas & Basse Mama, Houdou, 2019. "Does the EU Emissions Trading System induce investment leakage? Evidence from German multinational firms," Energy Economics, Elsevier, vol. 81(C), pages 479-492.
    19. Massimiliano Mazzanti & Antonio Musolesi, 2011. "Income and time related effects in EKC," Working Papers 201105, University of Ferrara, Department of Economics.
    20. van den Bijgaart, Inge, 2016. "Essays in environmental economics and policy," Other publications TiSEM 298bee2a-cb08-4173-9fe1-8, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    international spillovers; trade; carbon pricing;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:enp:wpaper:eprg1802. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ruth Newman (email available below). General contact details of provider: https://edirc.repec.org/data/jicamuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.