Carbon policy and the structure of global trade

Christoph Böhringer, Edward Balistreri and Thomas F. Rutherford ()
Additional contact information
Thomas F. Rutherford: University of Wisconsin; USA

No V-383-15, Working Papers from University of Oldenburg, Department of Economics

Abstract: Alternative perspectives on the structure of international trade have important implications for the evaluation of climate policy. In this paper we assess climate policy in the context of three important alternative trade formulations. First is a Heckscher-Ohlin model based on trade in homogeneous products, which establishes the traditional neoclassical view on comparative advantage. Second is an Armington model based on regionally differentiated goods, which constitutes a popular specifcation for numerical simulations of trade policy. Third is a Melitz model based on monopolistic-competition and firm heterogeneity. This heterogeneous-firms framework is adopted in many contemporary theoretic and empirical investigations in international trade. As we show in this paper, the three alternative trade formulations have important implications for the assessment of climate policy with respect to competitive effects for energy-intensive production (and hence carbon leakage) as well as the transmission of policy burdens across countries.

Keywords: Heterogeneous firms; carbon leakage; competitiveness (search for similar items in EconPapers)
JEL-codes: F12 F18 Q Q54 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-05, Revised 2015-05
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations:

Published in Oldenburg Working Papers V-383-15

Downloads: (external link)
http://www.uni-oldenburg.de/fileadmin/user_upload/ ... ete/vwl/V-383-15.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Carbon policy and the structure of global trade (2018)
Working Paper: Carbon policy and the structure of global trade (2015)
Working Paper: Carbon Policy and the Structure of Global Trade (2015)
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:old:dpaper:383

Access Statistics for this paper

More papers in Working Papers from University of Oldenburg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Catharina Schramm ().