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Four Changes to Trade Rules to Facilitate Climate Change Action

Author

Listed:
  • Aaditya Mattoo

    (World Bank)

  • Arvind Subramanian

    (Peterson Institute for International Economics)

Abstract

Generating technological progress requires deploying the full range of policy instruments, including those related to trade policy. The authors consider four areas: subsidization of green goods and technologies; border-tax adjustments (BTAs) related to carbon content; restrictions on the export of fossil fuels, especially natural gas; and intellectual property protection of new technologies and products related to climate change. They propose changes to trade rules that would promote climate change goals. The proposed changes have an underlying political economy logic and consistency. Changes would allow global environmental "bads" to be penalized (by permitting border taxes on less clean imports), global environmental goods and technologies to be promoted (by relaxing the constraints on the use of production and export subsidies and strengthening IPR protection), and prevent global environmental "goods" being penalized (by eliminating the export restrictions on natural gas).

Suggested Citation

  • Aaditya Mattoo & Arvind Subramanian, 2013. "Four Changes to Trade Rules to Facilitate Climate Change Action," Policy Briefs PB13-10, Peterson Institute for International Economics.
    • Handle: RePEc:iie:pbrief:pb13-10
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    References listed on IDEAS

    as
    1. Gary Clyde Hufbauer & Allie E. Bagnall & Julia Muir, 2013. "Liquefied Natural Gas Exports: An Opportunity for America," Policy Briefs PB13-6, Peterson Institute for International Economics.
    2. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    3. Green, Andrew, 2006. "Trade rules and climate change subsidies," World Trade Review, Cambridge University Press, vol. 5(3), pages 377-414, November.
    4. Henrik Horn & Petros C. Mavroidis, 2011. "To B(TA) or Not to B(TA)? On the Legality and Desirability of Border Tax Adjustments from a Trade Perspective," The World Economy, Wiley Blackwell, vol. 34(11), pages 1911-1937, November.
    5. Aaditya Mattoo & Arvind Subramanian & Dominique Mensbrugghe & Jianwu He, 2013. "Trade effects of alternative carbon border-tax schemes," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(3), pages 587-609, September.
    6. Gary Clyde Hufbauer & Steve Charnovitz & Jisun Kim, 2009. "Global Warming and the World Trading System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4280, April.
    7. Mavroidis, Petros, 2007. "Trade in Goods," OUP Catalogue, Oxford University Press, number 9780199239030.
    8. Bhagwati, Jagdish & Mavroidis, Petros C., 2007. "Is action against US exports for failure to sign Kyoto Protocol WTO-legal?," World Trade Review, Cambridge University Press, vol. 6(2), pages 299-310, July.
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    Cited by:

    1. Steve Charnovitz, 2014. "Green Subsidies and the WTO," RSCAS Working Papers 2014/93, European University Institute.
    2. John A. Mathews, 2017. "Global trade and promotion of cleantech industry: a post-Paris agenda," Climate Policy, Taylor & Francis Journals, vol. 17(1), pages 102-110, January.
    3. Arvind Subramanian & Martin Kessler, 2013. "The Hyperglobalization of Trade and Its Future," Working Paper Series WP13-6, Peterson Institute for International Economics.
    4. Charnovitz, Steve, 2014. "Green subsidies and the WTO," Policy Research Working Paper Series 7060, The World Bank.

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