Greenhouse Gas Emission Controls and Firm Locations in North-South Trade

Jota Ishikawa and Toshihiro Okubo

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper studies greenhouse gas (GHG) emission controls in the presence of international carbon leakage through international firm relocation. In a trade and geography framework with two countries ("North" and "South"), only North sets a target for GHG emissions. We compare the consequences of emission quotas, emission taxes, and emission standards under trade liberalization for the location of pollution-intensive and less pollution-intensive sectors and the degree of carbon leakage. With low trade costs, further trade liberalization increases global emissions by facilitating carbon leakage. Regulation by quotas leads to spatial sorting with less carbon leakage and less global emissions than regulation by taxes and standards.

Pages: 41 pages
Date: 2013-05
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-geo and nep-int
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Greenhouse-Gas Emission Controls and Firm Locations in North–South Trade (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:13045

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