Credibility of Trade Sanctions in Greenhouse Gas Mitigation Agreements in Agriculture and Forestry

Zeynep Burcu Irfanoglu

No 332055, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This study explores under what conditions a trade sanction can be an effective enforcement mechanism used by the US against China in global greenhouse (GHG) mitigation dilemma. The problem has the structure of prisoner’s dilemma and hence both the US and China have incentive to free-ride in GHG emissions abatement. It is found that if the US joined the rest of the world (ROW) in emissions abatement, the US could also convince China to comply with abatement using trade sanctions. As long as the carbon prices do not exceed certain threshold values, the trade sanction threat by the US on imports from China is credible.

Keywords: International Relations/Trade; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 13
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332055

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