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Trade and Climate Change: The Challenges Ahead

Nicole Mathys and Jaime de Melo ()

No P14, Working Papers from FERDI

Abstract: The outcome of the 15th conference of the Parties to the UNFCC showed a shift from a top-down approach with a collective target favoring environmental objectives to a bottom-up accord favoring political feasibility, with no meaningful binding agreement in sight, as the global climate regime and the global trade policy regime represented by the WTO appear to be on a collision course. Following a review of the alternative architectures for the next Climate Change Agreement, the paper outlines four areas in which trade will play a role: as a purveyor of technological transfer; as a mechanism to separate where abatement takes place from who bears the cost of abatement; as a participation mechanism; and as a way to address the pressures for border adjustments. Political-economy considerations are invoked to predict that a target system with a carbon credit system will be preferable to a carbon tax or to a portfolio system of treaties.

JEL-codes: F18 Q56 (search for similar items in EconPapers)
Date: 2010-10
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Working Paper: Trade and Climate Change: The Challenges Ahead (2010) Downloads
Working Paper: Trade and Climate Change: The Challenges Ahead (2010) Downloads
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