Supply-Use Framework for International Environmental Policy Analysis

Thijs ten Raa and Victoria Shestalova

Chapter 6 in Efficiency and Input-Output Analyses:Theory and Applications, 2021, pp 91-117 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The technical variation between countries in the production of goods and services, in terms of not only input coefficients, but also emission coefficients, creates scope for international trade to reduce environmental pressures. For this purpose we extend the theory of trade and the environment as to accommodate technical variation between countries in production and emissions. We use and steer close to the extended input and output tables, which include emission data. By treating environmental standards analogous to capital and labor capacity constraints, the aggregation problem for economic and environmental measures gets the same format as the well-understood aggregation problem for labor and capital. In a pilot application we determine the gains to free trade in products and emission permits.

Keywords: Efficiency; Input-Output; Benchmarking; Performance Measurement; TFP; Environmental Policy Analysis; Mark-ups; Consumer Surplus; CES Demand; Linkages; Heckscher-Ohlin Trade Flows; Leontief (search for similar items in EconPapers)
JEL-codes: C67 D O12 (search for similar items in EconPapers)
Date: 2021
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Journal Article: SUPPLY-USE FRAMEWORK FOR INTERNATIONAL ENVIRONMENTAL POLICY ANALYSIS (2015)
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