Carbon Motivated Regional Trade Arrangements: Analytics and Simulations / Yan Dong, John Whalley.

Format:

Book

Author/Creator:

Dong, Yan.

Contributor:

National Bureau of Economic Research.

Whalley, John.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14880.

NBER working paper series no. w14880

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Carbon Motivated Regional Trade Arrangements

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

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.

Notes:

Print version record

April 2009.