Trade, CO2, and the Environment

65 Pages Posted: 6 Jan 2014 Last revised: 2 Aug 2014

See all articles by Joseph S. Shapiro

Joseph S. Shapiro

University of California, Berkeley; National Bureau of Economic Research (NBER)

Date Written: July 1, 2014

Abstract

This paper puts trade'’s benefi…ts and environmental costs on the same theoretical and empirical footing in order to provide a more complete measure of trade'’s welfare effects. The paper describes a model of trade and the environment, compiles new data on the CO2 emissions from shipping, and estimates key parameters using panel data regressions. Results show that international trade's bene…fits exceed international trade’'s environmental costs by two orders of magnitude. While proposed regional or global carbon taxes on the CO2 emissions from transporting goods would increase global welfare and increase the implementing region'’s GDP, they would also harm poor countries.

Keywords: Climate Change, Environmental Regulations, International Trade

JEL Classification: F18; F64; H23; Q56

Suggested Citation

Shapiro, Joseph S., Trade, CO2, and the Environment (July 1, 2014). Available at SSRN: https://ssrn.com/abstract=2374883 or http://dx.doi.org/10.2139/ssrn.2374883

Joseph S. Shapiro (Contact Author)

University of California, Berkeley ( email )

HOME PAGE: http://joseph-s-shapiro.com

National Bureau of Economic Research (NBER) ( email )

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