GTAP Resources: Resource Display
| GTAP Resource #6940 |
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"Trade and the Environment: could the technique effect be the missing piece in environmental assessment of trade liberalisation?" by Humphreys, Lee Abstract Trade liberalisation affects GHG emissions through direct and indirect channels. Direct effects of trade on the environment are easily captured through scale (economic growth) and composition (structural changes). The 'technique effect' takes place where trade opening contributes to improvements in energy efficiency so that the production of goods and services generates less GHG emissions. It is considered an indirect effect from trade as it stems mostly from domestic environmental policies but can be enhanced by trade liberalisation. The overall impact of trade on GHG emissions depends on the magnitude of each of the scale, composition and technique effects so quantifying the technique effect is an important piece of the environmental assessment of trade liberalisation. This paper develops and applies a methodology to incorporate international technology spill-over into GTAP-E, to proxy for the inclusion of the technique effect. The proposed approach will capture a key driver of the technique effect and enrich the environmental assessment of the UK trade liberalisation agenda. International technology spillover has been explored previously in the literature but not in the context of UK trade liberalisation. For this paper, we will follow the approach of Perrado and De Cian (2014) by assuming that innovation and knowledge is embodied in machinery and equipment imports which then drives productivity changes in capital and energy. Similar to Gerlagh and Kuik (2014) we then include induced technical change in GTAP-E by transforming the technical change parameter, which is normally an exogenous parameter, into an endogenous variable. Once this proxy for the technique effect has been incorporated into GTAP-E, UK trade liberalisation scenarios, with and without endogenous technology spillover, will be used to assess the marginal impact that the technique effect has on the UK’s environmental assessment of trade liberalisation. |
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- Model extension/development - Climate impacts - Trade and the environment |
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Public Access  Paper (393.2 KB) Replicated: 0 time(s) Presentation (250.4 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 1:05:45 PM
