IDEAS home Printed from https://ideas.repec.org/a/diw/diwvjh/74-2-10.html
   My bibliography  Save this article

Trade Policy to Control Climate Change: Does the Stick Beat the Carrot?

Author

Listed:
  • Susanne Dröge
  • Claudia Kemfert

Abstract

Trade and climate change policies are closely related. We consider in a general equilibrium model the role of trade restrictions and energy-efficient technology transfers for the stabilisation of the Kyoto climate coalition. We find that a trade restriction policy leads to economic losses for a large number of countries and would not be suited to convince the United States to return to the Kyoto Protocol. The technology transaction via trade, however, induces major positive economic effects for participating economies as well as considerable reductions in emissions. Therefore, the claim that trade restrictions should be used as a stick to force countries to cooperate in climate change control is not supported in this study. Rather, the benefits of R&D spill-overs should be used as an incentive to promote participation. Internationaler Handel und Klimapolitik sind eng miteinander verknüpft. Mithilfe eines allgemeinen Gleichgewichtsmodells untersuchen wir, welche Rolle Handelseinschränkungen sowie Transfers von energieeffizienten technischen Innovationen für die Stabilisierung der Klimapolitik unter dem Kyoto-Protokoll spielen können. Handelseinschränkungen führen zu einer Verschlechterung der Handelsbilanz für die Mehrzahl der Länder und Regionen weltweit. Sie sind daher nicht geeignet, die USA zu einer Rückkehr in die Klimakoalition zu bewegen. Der Transfer neuer Technologien führt hingegen zu positiven ökonomischen Effekten in den beteiligten Ländern und darüber hinaus reduziert er auch stärker die Emissionen. Die Forderung, Klimaschutz durch Handelsrestriktionen zu erzwingen, kann somit nicht unterstützt werden. Vielmehr sollten technologische Kooperationen als Anreiz eingesetzt werden.

Suggested Citation

  • Susanne Dröge & Claudia Kemfert, 2005. "Trade Policy to Control Climate Change: Does the Stick Beat the Carrot?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(2), pages 235-248.
    • Handle: RePEc:diw:diwvjh:74-2-10
    DOI: 10.3790/vjh.74.2.235
    as

    Download full text from publisher

    File URL: https://doi.org/10.3790/vjh.74.2.235
    Download Restriction: no
    File URL: https://libkey.io/10.3790/vjh.74.2.235?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Frank Biermann & Rainer Brohm, 2005. "Border Adjustments on Energy Taxes: A Possible Tool for European Policymakers in Implementing the Kyoto Protocol?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(2), pages 249-258.
    2. Daniel Esty, 1994. "Greening the GATT: Trade, Environment, and the Future," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 40, April.
    3. Marzio Galeotti & Claudia Kemfert, 2004. "Interactions between Climate and Trade Policies: A Survey," Working Papers 2004.88, Fondazione Eni Enrico Mattei.
    4. Georg Muller-Furstenberger & Martin Wagner & Benito Muller, 2005. "Exploring the Carbon Kuznets Hypothesis," Others 0506009, University Library of Munich, Germany.
    5. Goldin,Ian & Winters,L. Alan (ed.), 1995. "The Economics of Sustainable Development," Cambridge Books, Cambridge University Press, number 9780521469579, January.
    6. Kemfert, Claudia, 2004. "Climate coalitions and international trade: assessment of cooperation incentives by issue linkage," Energy Policy, Elsevier, vol. 32(4), pages 455-465, March.
    7. Brewer, Thomas L & Young, Stephen, 1998. "Investment Issues at the WTO: The Architecture of Rules and the Settlement of Disputes," Journal of International Economic Law, Oxford University Press, vol. 1(3), pages 457-470, September.
    8. Dröge, Susanne & Trabold, Harald & Biermann, Frank & Böhm, Frédéric & Brohm, Rainer, 2004. "National climate change policies and WTO law: a case study of Germany's new policies," World Trade Review, Cambridge University Press, vol. 3(2), pages 161-187, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sferra, Fabio & Tavoni, Massimo, 2013. "Endogenous Participation in a Partial Climate Agreement with Open Entry: A Numerical Assessment," Climate Change and Sustainable Development 156486, Fondazione Eni Enrico Mattei (FEEM).
    2. Winchester Niven & Paltsev Sergey & Reilly John M, 2011. "Will Border Carbon Adjustments Work?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, January.
    3. Mehdi Abbas, 2011. "Carbon border adjustement, trade and climate governance : issues for OPEC economies," Post-Print halshs-00617923, HAL.
    4. Yan Dong & John Whalley, 2009. "How Large are the Impacts of Carbon Motivated Border Tax Adjustments," NBER Working Papers 15613, National Bureau of Economic Research, Inc.
    5. 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, June.
    6. Springmann, Marco, 2012. "A look inwards: Carbon tariffs versus internal improvements in emissions-trading systems," Energy Economics, Elsevier, vol. 34(S2), pages 228-239.
    7. John Whalley, 2009. "On the effectiveness of carbon-motivated border tax adjustments," ARTNeT Working Papers 63, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    8. Yan Dong & John Walley, 2012. "How Large Are The Impacts Of Carbon Motivated Border Tax Adjustments?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-28.
    9. John Whalley, 2009. "On the effectiveness of carbon-motivated border tax adjustments," Working Papers 6309, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
    2. Thomas Kuhn & Radomir Pestow & Anja Zenker, 2018. "Endogenous Climate Coalitions and Free Trade - Building the Missing Link," Chemnitz Economic Papers 018, Department of Economics, Chemnitz University of Technology.
    3. Alexandra E. Cirone & Johannes Urpelainen, 2013. "Trade sanctions in international environmental policy: Deterring or encouraging free riding?," Conflict Management and Peace Science, Peace Science Society (International), vol. 30(4), pages 309-334, September.
    4. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 204, Economics Division, School of Social Sciences, University of Southampton.
    5. Kemfert, Claudia & Zhang, ZhongXiang, 2003. "Linking developing country's cooperation on climate control with industrialized country's R&D and technology transfer," MPRA Paper 41473, University Library of Munich, Germany.
    6. Rauscher, Michael, 2001. "International trade, foreign investment, and the environment," Thuenen-Series of Applied Economic Theory 29, University of Rostock, Institute of Economics.
    7. Thomas Kuhn & Radomir Pestow & Anja Zenker, 2019. "Building Climate Coalitions on Preferential Free Trade Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 539-569, October.
    8. Jose Mendez & Lewis Gale, "undated". "A Note on the Empirical Relationship Between Trade, Growth and the Environment," Working Papers 2132836, Department of Economics, W. P. Carey School of Business, Arizona State University.
    9. Michael Harris, 2001. "Revaluations and Capital Gains in the Context of Natural Resource Accounting," Working Papers 2001.08, School of Economics, La Trobe University.
    10. Jha, Raghbendra & Murthy, K. V. Bhanu, 2003. "An inverse global environmental Kuznets curve," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 352-368, June.
    11. Elliott, Steven R., 2005. "Sustainability: an economic perspective," Resources, Conservation & Recycling, Elsevier, vol. 44(3), pages 263-277.
    12. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," RFF Working Paper Series dp-02-03, Resources for the Future.
    13. Rothman, Dale S., 1998. "Environmental Kuznets curves--real progress or passing the buck?: A case for consumption-based approaches," Ecological Economics, Elsevier, vol. 25(2), pages 177-194, May.
    14. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(1), pages 29-70, February.
    15. Alcott, Blake, 2008. "The sufficiency strategy: Would rich-world frugality lower environmental impact," Ecological Economics, Elsevier, vol. 64(4), pages 770-786, February.
    16. Barbara Buchner & Carlo Carraro, 2004. "Economic and environmental effectiveness of a technology-based climate protocol," Climate Policy, Taylor & Francis Journals, vol. 4(3), pages 229-248, September.
    17. Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February.
    18. Colyer, Dale, 2004. "Environmental Regulations And Competitiveness," Working Papers 19100, West Virginia University, Department of Agricultural Resource Economics.
    19. Ulph, Alistair, 2000. "Harmonization and Optimal Environmental Policy in a Federal System with Asymmetric Information," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 224-241, March.
    20. Jaeger, William K. & Kolpin, Van, 2008. "The Environmental Kuznets Curve from Multiple Perspectives," Climate Change Modelling and Policy Working Papers 36760, Fondazione Eni Enrico Mattei (FEEM).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwvjh:74-2-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.