Carbon leakage revisited : unilateral climate policy with directed technical change

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Show simple item record Di Maria, Corrado Van der Werf, Edwin 2009-02-09T17:37:39Z 2009-02-09T17:37:39Z CentER, Tilburg University en 2005-05
dc.identifier.issn 0924-7815
dc.description.abstract The 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.extent 4304 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher Tilburg University. Center for Economic Research en
dc.relation.ispartofseries CentER Discussion Paper Series en
dc.relation.ispartofseries No. 2005-68 en
dc.subject Climate policy en
dc.subject Carbon leakage en
dc.subject Directed technical change en
dc.subject International trade en
dc.subject.classification F18 en
dc.subject.classification O33 en
dc.subject.classification Q54 en
dc.subject.classification Q55 en
dc.subject.lcsh Environmental policy en
dc.subject.lcsh Technological innovations en
dc.subject.lcsh International trade en
dc.title Carbon leakage revisited : unilateral climate policy with directed technical change en
dc.type Working Paper en
dc.internal.authorurl Corrado Di Maria (web page) en
dc.internal.authorurl en
dc.internal.authorid UCD0030 en
dc.internal.availability Full text available en
dc.internal.webversions en
dc.status Not peer reviewed en
dc.neeo.contributor Di Maria|Corrado|aut|UCD0030
dc.neeo.contributor Van der Werf|Edwin|aut|

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