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Emissions Trading and International Trade

In: International Trade, Resource Mobility and Adjustments in a Changing World

Author

Listed:
  • Jota Ishikawa

    (Gakushuin University
    Hitotsubashi Institute for Advanced Study, Hitotsubashi University & RIETI)

  • Kazuharu Kiyono
  • Morihiro Yomogida

    (Sophia University)

Abstract

We explore the effects of international trade in goods and emissions permits on global warming and welfare in a two-country, two-good, general equilibrium model. International commodity trading does not reduce greenhouse gas (GHG) emissions if the comparative advantage stems from differences in per-capita emission allowances; however, it may reduce them if the comparative advantage is also based on differences in technologies. International emissions trading may not mitigate global warming. Whether it improves welfare would depend on how it affects the terms of trade in goods and global warming. A country with a large amount of per-capita emission allowances may import permits and suffer from deterioration in the terms of trade in goods.

Suggested Citation

  • Jota Ishikawa & Kazuharu Kiyono & Morihiro Yomogida, 2024. "Emissions Trading and International Trade," Contributions to Economics, in: Sugata Marjit & Biswajit Mandal (ed.), International Trade, Resource Mobility and Adjustments in a Changing World, chapter 0, pages 147-175, Springer.
    • Handle: RePEc:spr:conchp:978-981-97-5652-0_8
    DOI: 10.1007/978-981-97-5652-0_8
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    References listed on IDEAS

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    1. Jota Ishikawa & Kazuharu Kiyono & Morihiro Yomogida, 2012. "Is Emission Trading Beneficial?," The Japanese Economic Review, Japanese Economic Association, vol. 63(2), pages 185-203, June.
    2. Kazuharu Kiyono & Jota Ishikawa, 2013. "Environmental Management Policy Under International Carbon Leakage," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 1057-1083, August.
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    Cited by:

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