Working Paper: NBER ID: w17498
Authors: John Whalley
Abstract: This paper discusses the role that trade can potentially play in both negotiating and operating a post Kyoto/post 2012 global climate policy regime. As an addition to the bargaining set for a global climate negotiation, trade in principle widens the range of jointly beneficial potential outcomes and can in this sense be a potential facilitator of an agreed global climate regime. The reverse is also true, that in a linked climate-trade-finance global policy coordination structure that goes well beyond what was envisioned at Bretton Woods, climate now added to the global policy bargaining set also offers the prospect of potentially stronger trade disciplines (and even beyond WTO disciplines being negotiated). Trade policy can as well be an instrument for the implementation of a global climate regime, since trade provides a mechanism for achieving an internalization outcome for the global externality that climate change represents, and that provides a potentially more efficient outcome and also helps meet distributional objectives. In short, trade added to the emerging post 2012 climate regime can both expand the bargaining set for both (effectively linked) negotiations, and additionally provide an instrument for the implementation of an agreed outcome.
Keywords: Trade; Climate Policy; Global Negotiations; Post-Kyoto
JEL Codes: F13; F18; Q54; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade (F19) | climate negotiations (F51) |
| trade policy (F13) | successful climate agreements (Q54) |
| trade (F19) | jointly beneficial outcomes in climate negotiations (F51) |
| trade policy (F13) | implementation of climate commitments (Q54) |
| trade policy (F13) | stronger trade disciplines (F13) |
| trade measures (F13) | climate policy outcomes (Q58) |
| trade (F19) | bargaining set for linked negotiations (C78) |
| border tax adjustments (H25) | mitigate emissions leakage (F64) |