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Green industrial policy : trade and theory

  • Karp, Larry
  • Stevenson, Megan

This paper studies the reality and the potential for green industrial policy. It provides a summary of the green industrial policies, broadly understood, for five countries. It then considers the relation between green industrial policies and trade disputes, emphasizing the Brazil-United States dispute involving ethanol and the broader United States-China dispute. The theory of public policy provides many lessons for green industrial policy. The authors highlight four of these lessons, involving the Green Paradox, the choice of quantities versus prices with endogenous investment, the coordination issues arising from emissions control, and the ability of green industrial policies to promote cooperation in reducing a global public bad like carbon emissions.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6238.

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Date of creation: 01 Oct 2012
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Handle: RePEc:wbk:wbrwps:6238
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  1. Karp, Larry & Simon, Leo, 2012. "Participation Games and international environmental agreements: a nonparametric model," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5693n1nf, Department of Agricultural & Resource Economics, UC Berkeley.
  2. Karp, Larry & Zhang, Jiangfeng, 2008. "Taxes Versus Quantities for a Stock Pollutant with Endogenous Abatement Costs and Asymmetric Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt84q0s8tb, Department of Agricultural & Resource Economics, UC Berkeley.
  3. Hoel, Michael & Karp, Larry, 2002. "Taxes versus quotas for a stock pollutant," Resource and Energy Economics, Elsevier, vol. 24(4), pages 367-384, November.
  4. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics 19638, University of Munich, Department of Economics.
  5. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, Elsevier.
  6. Chang, Ha-Joon, 2006. "Industrial policy in East Asia - lessons for Europe," EIB Papers 11/2006, European Investment Bank, Economics Department.
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