Carbon Motivated Regional Trade Arrangements: Analytics and Simulations
This paper presents both analytics and numerical simulation results relevant to proposals for carbon motivated regional trade agreements summarized in Dong & Whalley(2008). Unlike traditional regional trade agreements, by lowing tariffs on participant's low carbon emission goods and setting penalties on outsiders to force them to join such agreements , carbon motivated regional trade agreements reflect an effective merging of trade and climate change regimes, and are rising in profile as part of the post 2012 Copenhagen UNFCC negotiation. By adding country energy extraction cost functions, we develop a multi-region general equilibrium structure with endogenously determined energy supply. We calibrate our model to business as usual scenarios for the period 2006-2036. Our results show that carbon motivated regional agreements can reduce global emissions, but the effect is very small and even with penalty mechanisms used, the effects are still small. This supports the basic idea in our previous policy paper that trade policy is likely to be a relatively minor consideration in climate change containment.
|Date of creation:||Apr 2009|
|Publication status:||published as Dong, Yan & Whalley, John, 2011. "Carbon motivated regional trade arrangements: Analytics and simulations," Economic Modelling, Elsevier, vol. 28(6), pages 2783-2792.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Raymond RIEZMAN, 2013.
"A 3 × 3 Model of Customs Unions,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 1, pages 7-20
World Scientific Publishing Co. Pte. Ltd..
- Bhattacharyya, Subhes C., 1996. "Applied general equilibrium models for energy studies: a survey," Energy Economics, Elsevier, vol. 18(3), pages 145-164, July.
- Alan S. Manne & Richard G. Richels, 1999. "The Kyoto Protocol: A Cost-Effective Strategy for Meeting Environmental Objectives?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-23.
- Kemfert, Claudia, 1998. "Estimated substitution elasticities of a nested CES production function approach for Germany," Energy Economics, Elsevier, vol. 20(3), pages 249-264, June.
- Yuezhou Cai & Raymond Riezman & John Whalley, 2009.
"International Trade and the Negotiability of Global Climate Change Agreements,"
NBER Working Papers
14711, National Bureau of Economic Research, Inc.
- 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.
- Ben Lockwood & John Whalley, 2010.
"Carbon-motivated Border Tax Adjustments: Old Wine in Green Bottles?,"
The World Economy,
Wiley Blackwell, vol. 33(6), pages 810-819, 06.
- Ben Lockwood & John Whalley, 2008. "Carbon Motivated Border Tax Adjustments: Old Wine in Green Bottles?," NBER Working Papers 14025, National Bureau of Economic Research, Inc.
- Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
- Yan Dong & John Whalley, 2010.
"Carbon, Trade Policy and Carbon Free Trade Areas,"
The World Economy,
Wiley Blackwell, vol. 33(9), pages 1073-1094, 09.
- Yan Dong & John Whalley, 2008. "Carbon, Trade Policy, and Carbon Free Trade Areas," NBER Working Papers 14431, National Bureau of Economic Research, Inc.
- Yan Dong & John Whalley, 2008. "Carbon, Trade Policy, And Carbon Free Trade Areas," Trade Working Papers 22730, East Asian Bureau of Economic Research.
- R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," Review of Economic Studies, Oxford University Press, vol. 24(1), pages 11-32.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:14880. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.