Market Structure and the Environmental Implications of Trade Liberalization: Russia's Accession to the World Trade Organization

Christoph Böhringer, Thomas F. Rutherford, David Tarr and Natalia Turdyeva

Review of International Economics, 2015, vol. 23, issue 5, 897-923

Abstract: We investigate the environmental impacts of Russia's World Trade Organization (WTO) accession with a computable general equilibrium model incorporating imperfectly competitive firms, foreign direct investment and endogenous productivity. WTO accession increases CO 2 emissions through technique (−), composition (+) and scale (+) effects. We consider three complementary policies to limit CO 2 emissions: cap and trade, emission intensity standards and energy efficiency standards. With imperfectly competitive firms, gains from WTO accession result with any of these policies. If we assume perfectly competitive market structures, the negative environmental impacts of WTO accession are smaller and no net gains arise when environmental regulation involves energy intensity or efficiency standards.

Date: 2015
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