French Optimal and Robust Trade Policies Under Carbon Footprint Reduction Constraint and Uncertainties

Julien Ancel (), Théo Mandonnet () and Michel de Lara ()
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Julien Ancel: AgroParisTech
Théo Mandonnet: AgroParisTech
Michel de Lara: CERMICS - Centre d'Enseignement et de Recherche en Mathématiques et Calcul Scientifique - ENPC - École nationale des ponts et chaussées

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Abstract: To respect their pledge to fulfill the 2015 Paris Agreement on climate change, many countries have designed so-called Nationally Determined Contributions. One lever to reduce national greenhouse gases emissions is to change the trade policy of the country, in order to import more from the current and future least carbon-intensive economies. However, future carbon intensities reductions are uncertain, leading to the production of emissions scenarios by several institutes. A fitting trade policy is then classically obtained for each of such scenarios. By contrast with such perfect foresight (anticipative) approach, we propose to take into account all the possible futures simultaneously, in order to determine a "robust-touncertainty" trade policy. Using a two-stage stochastic optimization framework between 2015 and 2030, we study the French case and we outline a method to design a robust trade policy in a highly uncertain and constrained context. This optimal policy is then compared to optimal-by-scenario policies and to current French imports.

Keywords: Optimal trade policy; Stochastic optimization; Import shares; Nationally Determined Contribution; Carbon footprint; France (search for similar items in EconPapers)
Date: 2022-07-26
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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