The transition from autocracy to democracy may lead a country to break-up. The break-ups of the USSR and Yugoslavia led to sharp falls in emissions. If something similar would happen in China, projected emissions would fall by 50% or more. Break-up uncertainty dominates other scenario uncertainty.

This paper exploits the surge in Chinese exports from 1994 to 2004 as a natural experiment to evaluate the effects of a unilateral low wage trade and competition shock to producers in Mexico. We find that this shock causes selection at both firm and product levels as its impact is highly...