Global trade and climate policy scenarios – Impact on Finland

Juha Honkatukia, Ville Kaitila, Markku Kotilainen and Janne Niemi

No 37, Working Papers from VATT Institute for Economic Research

Abstract: In this study we use the dynamic version of the GTAP model to analyse the effects of global trade policy changes and their interaction with different global climate policy regimes from Finland's point of view, and in particular, implications for Finnish export sectors. Scenarios explore further trade liberalisation as well as effects of higher-than-current tariffs on world markets. As a complementary dimension we analyse the impact of a global climate agreement that will lead to an additional improvement in energy efficiency and impose limitations to GHG emissions. We find a general trend towards a greater weight of services sector in Finland's total exports volume, whilst the share of traditionally important heavy industry and electronics industries declines. These trends are amplified by further trade liberalisation and slowed down by new barriers for trade. The global coverage of climate policy is particularly significant for energy-intensive industries.

Keywords: trade policy, climate policy, general equilibrium model, Environment, Ympäristö, International comparisons, Kansainväliset vertailut, Policy analysis and modelling, Päätöksenteon tuki ja mallintaminen, C680 - Computable General Equilibrium Models, F130 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations, Q580 - Environmental Economics: Government Policy (Environmental Taxes; Tradable Permits; Command and Control; Regulation), (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-int and nep-res
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