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GTAP Resource #6681

"Environmental Goods Trade Liberalization: A Quantitative Modelling Study of Trade and Emission Effects"
by Bacchetta, Marc, Eddy Bekkers, Jm Solleder and Enxhi Tresa

Trade liberalization in environmental goods is expected to mitigate climate change by limiting greenhouse gas emissions. In this paper, quantitative modelling is used to generate projections on the trade, GDP, and emission effects of a potential trade liberalization agreement in energy related environmental goods. Two channels reducing greenhouse gas (GHG) emissions are considered: an increase in energy efficiency through the reduction in import prices of energy related environmental goods (EREGs) and a reduction in the costs of intermediate and capital goods used in electricity production from renewable energy sources. We evaluate four scenarios based on combinations of reductions in tariffs and NTMs of EREGs, and environmentally preferable products (EPPs). Simulations with the WTO Global Trade Model project: (i) an increase in exports of EREGs and EPPs both at the global level and in most regions; (ii) a modest increase in GDP in all regions because of falling tariffs, NTMs, and increased energy efficiency; (iii) a modest reduction in global emissions of about 0.3%.

Keywords: Environmental Goods, Trade Liberalization, Emissions
JEL Classification: F18

Resource Details (Export Citation) GTAP Keywords
Category: 2022 Conference Paper
Status: Published
By/In: Presented during the 25th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2022
Created: Bacchetta, M. (4/18/2022)
Updated: Tresa, E. (5/30/2022)
Visits: 748
- Climate change policy
- Trade and the environment

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