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Kyoto and the carbon content of trade

Author

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  • Aichele, Rahel
  • Felbermayr, Gabriel

Abstract

A unilateral tax on CO2 emissions may drive up indirect carbon imports from non-committed countries, leading to carbon leakage. Using a gravity model of carbon trade, we analyze the effect of the Kyoto Protocol on the carbon content of bilateral trade. We construct a novel data set of CO2 emissions embodied in bilateral trade flows. Its panel structure allows dealing with endogenous selection of countries into the Protocol. We find strong statistical evidence for Kyoto commitments to affect carbon trade. On average, the Kyoto protocol led to substantial carbon leakage but its total effect on carbon trade was only minor.

Suggested Citation

  • Aichele, Rahel & Felbermayr, Gabriel, 2010. "Kyoto and the carbon content of trade," FZID Discussion Papers 10-2010, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  • Handle: RePEc:zbw:fziddp:102010
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    References listed on IDEAS

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    Cited by:

    1. Nicole A. MATHYS & Jaime DE MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    2. de Melo, Jaime & Mathys, Nicole Andréa, 2010. "Trade and Climate Change: The Challenges Ahead," CEPR Discussion Papers 8032, C.E.P.R. Discussion Papers.
    3. Jaime de Melo, 2014. "Trade in a “Green Growth” Development Strategy. Issues and Challenges," Revue d’économie du développement, De Boeck Université, vol. 22(HS01), pages 157-184.
    4. Jaime de Melo, 2012. "Trade in a 'Green Growth' Development Strategy Global Scale Issues and Challenges," Working Papers 2012.47, Fondazione Eni Enrico Mattei.
    5. Jared C. Carbone & Nicholas Rivers, 2014. "Climate policy and competitiveness: Policy guidance and quantitative evidence," Working Papers 2014-05, Colorado School of Mines, Division of Economics and Business.
    6. Douglas, Stratford & Nishioka, Shuichiro, 2012. "International differences in emissions intensity and emissions content of global trade," Journal of Development Economics, Elsevier, vol. 99(2), pages 415-427.
    7. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications, The World Bank, number 2283.
    8. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2011. "How well did the Kyoto Protocol work? A dynamic-GMM approach with external instruments," Ibero America Institute for Econ. Research (IAI) Discussion Papers 212, Ibero-America Institute for Economic Research.
    9. Misato Sato, 2014. "Embodied Carbon In Trade: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 831-861, December.
    10. Mehdi Abbas, 2013. "Libre-échange et changements climatiques : " soutien mutuel " ou divergence ?," Post-Print halshs-00844818, HAL.
    11. Melenberg, B. & Vollebergh, H.R.J. & Dijkgraaf, E., 2011. "Grazing the Commons : Global Carbon Emissions Forever?," Discussion Paper 2011-020, Tilburg University, Center for Economic Research.

    More about this item

    Keywords

    Carbon leakage; gravity model; international trade; climate change; embodied emission; input-output analysis;

    JEL classification:

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

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