The impact of climate legislation on trade-related carbon emissions, 1997–2017

Shaikh Eskander () and Sam Fankhauser ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We present empirical evidence of the international emissions impact from climate change legislation in 98 countries between 1997 and 2017, using data from Climate Change Laws of the World. Unlike traditional measures of carbon leakage, we focus on net carbon imports, that is, the difference between consumption and production emissions. Using different estimation techniques, we estimate the impact on carbon intensity of two legislation variables, recent legislation (passed in the last 3 years) and older legislation (passed more than 3 years ago). We find that recent legislation reduces production emissions more than consumption emissions, while older laws have a bigger impact on consumption emissions. The combined effect of these changes on net carbon imports is very small. Overall, we find no evidence that domestic climate legislation has increased international carbon leakage over the past two decades. Indeed, in high-income countries the longrun leakage rate may even be negative.

Keywords: climate change legislation; climate policy; carbon leakage; pollution havens; production emissions; consumption emissions; Centre for Climate Change Economics and Policy; Strategic Research Fund; Faculty of Business and Social Sciences (search for similar items in EconPapers)
JEL-codes: F18 K32 Q54 Q58 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2021-07-27
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-int and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:111509

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