Carbon leakage revisited : unilateral climate policy with directed technical change

DC FieldValueLanguage
dc.contributor.authorDi Maria, Corrado-
dc.contributor.authorVan der Werf, Edwin-, Tilburg Universityen
dc.description.abstractThe increase in carbon dioxide emissions by some countries in reaction to an emission reduction by countries with climate policy (carbon leakage) is seen as a serious threat to unilateral climate policy. Using a two-country model where only one of the countries enforces an exogenous cap on emissions, this paper analyzes the effect of technical change that can be directed towards the clean or dirty input, on carbon leakage. We show that, as long as technical change cannot be directed, there will always be carbon leakage through the standard terms-of-trade effect. However, once we allow for directed technical change, a counterbalancing induced technology effect arises and carbon leakage will generally be lower. Moreover, we show that when the relative demand for energy is sufficiently elastic, carbon leakage may be negative: the technology effect induces the unconstrained region to voluntarily reduce its own emissions.en
dc.format.extent4304 bytes-
dc.publisherTilburg University. Center for Economic Researchen
dc.relation.ispartofseriesCentER Discussion Paper Seriesen
dc.relation.ispartofseriesNo. 2005-68en
dc.subjectClimate policyen
dc.subjectCarbon leakageen
dc.subjectDirected technical changeen
dc.subjectInternational tradeen
dc.subject.lcshEnvironmental policyen
dc.subject.lcshTechnological innovationsen
dc.subject.lcshInternational tradeen
dc.titleCarbon leakage revisited : unilateral climate policy with directed technical changeen
dc.typeWorking Paperen
dc.internal.authorurlCorrado Di Maria (web page)en
dc.internal.availabilityFull text availableen
dc.statusNot peer revieweden
dc.neeo.contributorDi Maria|Corrado|aut|-
dc.neeo.contributorVan der Werf|Edwin|aut|-
item.fulltextWith Fulltext-
Appears in Collections:Architecture, Planning and Environmental Policy Research Collection
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