Free Trade and Global Warming: A Trade Theory View of the Kyoto Protocol

54 Pages Posted: 16 May 2000 Last revised: 5 Jun 2022

See all articles by Brian R. Copeland

Brian R. Copeland

University of British Columbia

M. Scott Taylor

University of Calgary - Department of Economics

Date Written: April 2000

Abstract

This paper demonstrates how three important results in environmental economics, true under mild conditions in closed economies, are false or need serious amendment in a world with international trade in goods. Since the three results we highlight have framed much of the ongoing discussion and research on the Kyoto protocol our viewpoint from trade theory suggests a re-examination may be in order. Specifically, we demonstrate that in an open trading world, but not in a closed economy setting: (1) unilateral emission reductions by the rich North can create self-interested emission reductions by the unconstrained poor South; (2) simple rules for allocating emission reductions across countries (such as uniform reductions) may well be efficient even if international trade in emission permits is not allowed; and (3) when international emission permit trade does occur it may make both participants in the trade worse off and increase global emissions.

Suggested Citation

Copeland, Brian and Taylor, Michael Scott, Free Trade and Global Warming: A Trade Theory View of the Kyoto Protocol (April 2000). NBER Working Paper No. w7657, Available at SSRN: https://ssrn.com/abstract=228131

Brian Copeland (Contact Author)

University of British Columbia ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
604-822-8215 (Phone)

Michael Scott Taylor

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
77
Abstract Views
1,978
Rank
464,830
PlumX Metrics