Mitigating Emissions Associated With the Production of Traded Goods

• Main Authors: Quirapas, Dan André, Chan, Brian Irvyn, Lamberte, Albert E., Rapada, Maria Zunally, Yu, Krista Danielle
• Format: text
• Published: Animo Repository 2021
• Subjects: gravity model; climate change; emissions embodied in trade climate change mitigation; pollution haven hypothesis; environment; Natural Resource Economics; Natural Resources Management and Policy
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/85; https://animorepository.dlsu.edu.ph/context/res_aki/article/1093/viewcontent/Mitigating_Emissions_Associated_With_the_Production_of_Traded_Goods.pdf
• Institution: De La Salle University

The environmental impact of international trade is a concerning issue in the fight against climate change. Trade liberalization—combined with globally fragmented environmental policies—is often associated with the formation of pollution havens. This is because trade enables emissions leakages, which is defined as the outsourcing of emissions-intensive production to countries with weaker environmental regulations. Therefore, literature on this subject has suggested that a globally coordinated policy response is necessary to mitigate the impact of trade on climate change (Aichele & Felbermayr, 2012; Ben-David et al., 2020; Felbmermayr & Peterson, 2020). However, some studies have found that unilateral policy actions have no tangible effect on the volume of emissions associated with trade and, in some cases, the reduction of emissions volume associated with trade (Baylis et al., 2014; Kumar & Prabkahar, 2016; Hoekstra et al., 2016). This policy brief aims to provide insights on unilateral or multilateral actions countries can take to mitigate the impact of embodied emissions associated with the production of traded goods.