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

by Giles Atkinson, Kirk Hamilton, Giovanni Ruta, and Dominique Van Der Mensbrugghe

- 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.

Giles Atkinson, Kirk Hamilton, Giovanni Ruta, and Dominique Van Der Mensbrugghe (2010). "Trade in 'Virtual Carbon': Empirical Results and Implications for Policy." World Bank Policy Research working paper no. WPS 5194, Jan 2010.