Trade Costs, CO2, and the Environment

Joseph Shapiro

American Economic Journal: Economic Policy, 2016, vol. 8, issue 4, 220-54

Abstract: This paper quantifies how international trade affects CO2 emissions and analyzes the welfare consequences of regulating the CO2 emissions from shipping. To this end, the paper describes a model of trade and the environment, compiles new data on the CO2 emissions from shipping, and estimates key parameters using panel data regressions. Results show that the benefits of international trade exceed trade's environmental costs due to CO2 emissions by two orders of magnitude. While proposed regional carbon taxes on the CO2 emissions from shipping would increase global welfare and increase the implementing region's GDP, they would also harm poor countries.

JEL-codes: F18 H23 H87 L92 Q54 Q56 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/pol.20150168
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Citations: View citations in EconPapers (66)

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