Carbon Motivated Regional Trade Arrangements: Analytics and Simulations

by Yan Dong and John Whalley

- This paper presents both analytics and numerical simulation results relevant to proposals for carbon motivated regional trade agreements summarized in Dong & Whalley(2008). Our results show that carbon motivated regional agreements can reduce global emissions, but the effect is very small and even with penalty mechanisms used, the effects are still small. This supports the basic idea in our previous policy paper that trade policy is likely to be a relatively minor consideration in climate change containment.

Dong, Y. and J. Whalley (2009). "Carbon Motivated Regional Trade Arrangements: Analytics and Simulations." NBER Working Paper No. 14880, April 2009.