December 5, 2010

The Global Effects of Subglobal Climate Policies

by Christoph Böhringer, Carolyn Fischer and Knut Einar Rosendahl

- Missing from much of the debate on trade-related measures is a broader understanding of how climate policies implemented unilaterally (or subglobally) affect all countries in the global trading system. Arguably, the largest impacts are from the targeted carbon pricing itself, which generates macroeconomic effects, terms-of-trade changes, and shifts in global energy demand and prices; it also changes the relative prices of certain energy-intensive goods. This paper studies how climate policies implemented in certain major economies (the European Union and the United States) affect the global distribution of economic and environmental outcomes, and how these outcomes may be altered by complementary policies aimed at addressing carbon leakage.

Böhringer, C., C. Fischer and K.E. Rosendahl (2010). "The Global Effects of Subglobal Climate Policies." Discussion Papers 634 - Statistics Norway, Nov 2010.