Approximating the First order Effects of AfCFTA Tariff Reductions on CO2 Emissions

Jaime De Melo and Jean-Marc Solleder

Working Papers from African Economic Research Consortium

Abstract: This paper explores the likely effects of tariff reductions under the African Continental Free Trade Area (AfCFTA) on carbon dioxide (CO2) emissions. It proceeds in three steps, with all estimates relying on the most recent, i.e. 2015, disaggregated data on emissions intensities. First, we show that, across African countries, CO2 intensities are higher in the more protected sectors, so that, at unchanged emission intensities, tariff elimination on intra-African trade during AfCFTA should favour CO2 intensive activities. Second, for the EAC and ECOWAS, the two RECs for which AfCFTA-compliant tariff reduction schedules are available, we estimate that removing tariffs on goods in the tariff elimination list would reduce progressively the carbon intensity of trade for these goods. The estimates suggest that an increase of 1% of the emission intensity is associated with a decrease of about 0.09% of the MFN tariff. Third, to see which effect will dominate, we estimate partial equilibrium effects of full tariff elimination under AfCFTA and find that intra-African trade would increase by 32% and emissions embedded in trade by 24%, implying a CO2 elasticity to trade of 0.74, thus, reducing the CO2 emission intensity of Intra-African trade.

Date: 2024
New Economics Papers: this item is included in nep-env and nep-int
Note: African Economic Research Consortium
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publication.aercafricalibrary.org/handle/123456789/3912 (application/pdf)

Related works:
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:aer:wpaper:77a7d84a-0c8e-4b20-b1c1-a89ee8d596c8

Access Statistics for this paper

More papers in Working Papers from African Economic Research Consortium Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Njiru ().