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Do Climate Mitigation Efforts Hurt Trade Performance?

Author

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  • Jean-Louis Combes

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Pascale Combes Motel

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Somlanare Romuald Kinda

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article provides new evidence on the effect of a difference in climate policy between trading partners on their bilateral trade flow for a sample of developed and developing countries over the 1980-2010 period. It innovates in two aspects. First, while previous studies have used partial measures of climate regulation, we estimate a measure of performance of a country’s domestic efforts for climate mitigation. This measure is the difference between observed CO2 emissions levels and “structural” emissions, i.e. the emissions predicted by the determinants of environmental degradation as identified and modelled in the literature. Second, the effect of these efforts on bilateral trade flows is assessed using a gravity model. A difference in domestic efforts between trading partners has no effect on aggregate trade flows. Put differently, weak domestic efforts do not imply comparative advantage. In addition, similarities in domestic efforts, whether they are lax or stringent, are not shown to affect trade flows. These results are not influenced by the goods’ characteristics (manufactured goods or raw materials) and are robust for different estimators.

Suggested Citation

  • Jean-Louis Combes & Pascale Combes Motel & Somlanare Romuald Kinda, 2016. "Do Climate Mitigation Efforts Hurt Trade Performance?," Post-Print halshs-01418253, HAL.
  • Handle: RePEc:hal:journl:halshs-01418253 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01418253
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    More about this item

    Keywords

    Trade flows – Gravity model – Domestic Efforts for Climate Mitigation – Structural CO2 emissions – P;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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