Environmental Policy and the CO2 Emissions Embodied in International Trade

Koutchogna Kokou Edem Assogbavi () and Stephane Dees
Additional contact information
Koutchogna Kokou Edem Assogbavi: Banque de France, Univ. Bordeaux

Environmental & Resource Economics, 2023, vol. 84, issue 2, No 6, 507-527

Abstract: Abstract As polices to curb carbon emissions are not implemented similarly across countries, a so-called “carbon leakage” may offset domestic carbon reductions at the global level by redirecting CO2-intensive production to places with less stringent environmental regulation. This article uses a standard gravity model with panel data to assess whether a tightening in environmental policy plays as an incentive to offshore highly polluting activities. Our results show no evidence of carbon leakage through international trade, as stringent environment policy leads generally to a reduction in CO2 emissions embodied in traded goods and services, both at aggregate and sectoral levels. However, we do find evidence of carbon leakage when considering imports from countries with the most stringent environmental policy, suggesting the need for economies committed to carbon neutrality targets to tackle the issue of global cooperation on climate policy.

Keywords: CO2 emissions; International trade; Panel data models (search for similar items in EconPapers)
JEL-codes: C32 F18 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10640-022-00734-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Environmental policy and the CO2 emissions embodied in international trade (2021)
Working Paper: Environmental policy and the CO2 emissions embodied in international trade (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:84:y:2023:i:2:d:10.1007_s10640-022-00734-6

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-022-00734-6

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().