Trade In'Virtual Carbon': Empirical Results and Implications for Policy

30 Pages Posted: 20 Apr 2016

See all articles by Giles Atkinson

Giles Atkinson

London School of Economics and Political Science (LSE) - Department of Geography and Environment

Kirk Hamilton

World Bank

Giovanni Ruta

World Bank - Environment and Natural Resources Division

Dominique van der Mensbrugghe

World Bank

Date Written: January 1, 2010

Abstract

The fact that developing countries do not have carbon emission caps under the Kyoto Protocol has led to the current interest in high-income countries in border taxes on the "virtual" carbon content of imports. The authors use Global Trade Analysis Project data and input-output analysis to estimate the flows of virtual carbon implicit in domestic production technologies and the pattern of international trade. The results present striking evidence on the wide variation in the carbon-intensiveness of trade across countries, with major developing countries being large net exporters of virtual carbon. The analysis suggests that tax rates of $50 per ton of virtual carbon could lead to very substantial effective tariff rates on the exports of the most carbon-intensive developing nations.

Keywords: Climate Change Mitigation and Green House Gases, Environmental Economics & Policies, Climate Change Economics, Economic Theory & Research, Environment and Energy Efficiency

Suggested Citation

Atkinson, Giles and Hamilton, Kirk and Ruta, Giovanni and van der Mensbrugghe, Dominique, Trade In'Virtual Carbon': Empirical Results and Implications for Policy (January 1, 2010). World Bank Policy Research Working Paper No. 5194. Available at SSRN: https://ssrn.com/abstract=1547633

Giles Atkinson (Contact Author)

London School of Economics and Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Kirk Hamilton

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Giovanni Ruta

World Bank - Environment and Natural Resources Division ( email )

Washington, DC 20433
United States

Dominique Van der Mensbrugghe

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-0052 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/dvandermensbrugghe

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