There are often conflicts between proponents of trade and environmental activists. This paper shows, however, how trade agreements can be designed so as to motivate environmental conservation. I first analyze a standard trade model, where resource exploitation (e.g., deforestation) is a...

This paper estimates that the macroeconomic damages from climate change are six times larger than previously thought. We exploit natural variability in global temperature and rely on time-series variation. A 1°C increase in global temperature leads to a 12% decline in world GDP. Global...

We study the role of trade policy in one of the most pressing climate policy challenges that developing countries face: meeting voluntary emission restraints (VERs). To do so, we develop a general equilibrium trade model that extends Caliendo and Parro (2015) in three dimensions. First, we model...

Maritime shipping emits as much fine particulate matter as half of global road traffic. We are the first to measure the consequences of US maritime emissions standards on air quality, human health, racial exposure disparities, and behavior. The introduction of US maritime emissions control areas...

A unilateral carbon tax trades off the distortionary costs of taxation and the future gains from slowing down global warming. Because the cost is local and immediate, whereas the benefit is global and delayed, this tradeoff tends to be unfavorable to unilateral carbon taxes. We show that this...

Reductions in greenhouse gas emissions are a global public good, which makes it efficient to act globally when addressing this challenge. We lay out several reasons that high-income countries seeking to mitigate climate change might have greater impact if they invest their resources in...

This paper proposes that strong financial, judicial, and labor market institutions provide comparative advantage in clean industries, and thereby improve a country's environmental quality. Five complementary tests support this hypothesis. First, industries that depend on institutions are...

Considerable progress has been made in our understanding of the relationship between international trade and the environment since Gene Grossman and Alan Krueger published their now seminal working paper examining the potential environmental effects of the North American Free Trade Agreement in...

We characterize how firms structure supply chains under climate risk. Using new data on the universe of firm-to-firm transactions from an Indian state, we show that firms diversify sourcing locations, and suppliers exposed to climate risk charge lower prices. Our event-study analysis finds that...

Climate policies vary widely across countries, with some countries imposing stringent emissions policies and others doing very little. When climate policies vary across countries, energy-intensive industries have an incentive to relocate to places with few or no emissions restrictions, an effect...