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Climate Policy and Trade in Polluting Technologies

Author

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  • Ferguson, Shon

    (Department of Economics, Swedish University of Agricultural Sciences (SLU))

  • Heijmans, Roweno J.R.K.

    (Department of Business and Management Science, NHH Norwegian School of Economics)

Abstract

This study estimates the impact of carbon pricing on international trade in equipment used in the combustion of fossil fuels during the period 1995–2021. Using detailed data on bilateral trade combined with data on domestic carbon prices, we find that carbon pricing policies are associated with greater exports of this equipment. We provide a simple model of international trade in polluting technologies that can explain this outcome. Our results provide new evidence for this unexplored form of leakage due to more stringent climate policies.

Suggested Citation

  • Ferguson, Shon & Heijmans, Roweno J.R.K., 2023. "Climate Policy and Trade in Polluting Technologies," Working Paper Series 1470, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1470
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    References listed on IDEAS

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    More about this item

    Keywords

    Emissions pricing; Cap and trade; Carbon leakage; International trade in technologies;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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