In this paper, we discuss the endogenous formation of self-enforcing climate coalitions linked to the issue of a free trade agreement. As a framework, a strategic trade model is used in which countries may discourage greenhouse gas emissions by means of an import tariff on dirty goods. In addition, countries can set an emissions cap being effective on a permit market. Our main focus, however, is on the utilization of terms of trade privileges provided to members of a preferential free trade area. We propose evidence for that the welfare gains of trade liberalization are strongly promoting the formation of climate coalitions. In the parametrical simulation of the model, global emissions as well as climate change damages are found significantly reduced compared to the BAU scenario while global welfare is found significantly higher.
| Identifer | oai:union.ndltd.org:DRESDEN/oai:qucosa:de:qucosa:20378 |
| Date | 08 January 2016 |
| Creators | Kuhn, Thomas, Pestow, Radomir, Zenker, Anja |
| Publisher | Technische Universität Chemnitz |
| Source Sets | Hochschulschriftenserver (HSSS) der SLUB Dresden |
| Language | English |
| Detected Language | English |
| Type | info:eu-repo/semantics/publishedVersion, doc-type:Other, info:eu-repo/semantics/other, doc-type:Text |
| Rights | info:eu-repo/semantics/openAccess |
| Relation | urn:nbn:de:bsz:ch1-qucosa-154754, qucosa:20140 |
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