In this paper, we develop a two-country world differential game model with a polluting firm in each country where there is transportation cost to investigate the equilibrium of the game between firms when they decide to trade or not and to see under which conditions social welfare coincides with...

There is growing clamor in industrial countries for additional border taxes on imports from countries with lower carbon prices. A key factor affecting the impact of these taxes is whether they are based on the carbon content of imports or the carbon content in domestic production. Our...

This paper investigates if differences in environmental regulations can influence FDI flows in a multi-country setting taking into account the so-called third-country effects. We examine bilateral FDI flows using a new extended OECD investment database which covers great number of host countries...

The paper considers a situation where two countries - the North and the South - use a non-traded polluting input to produce the goods for final consumption. The North is more efficient in both, production and abatement processes. The study compares the effects of the transfer of abatement...

This paper analyzes the situation in which a national government introduces environmental regulations. Within the framework of an international duopoly with environmental regulations, this paper shows that an environmental tax imposed by the government in the home country can induce a foreign...

A two-tier climate club exploits the comparative advantage of large countries to mete out punishments through trade, while taking their capacity to resist punishment as a constraint. Countries outside the coalition price carbon at a fixed fraction of the average carbon price adopted within the...

The present paper focuses on earmarking of taxation to pay for public pollution abatement within the context of trade and domestic tax reforms. We identify situations in which an increase in public abatement only increases welfare by more than that in private abatement only. We also show that...

We study the influence of trade exposed producer lobby groups on national climate policies and the formation of a climate coalition if the coalition uses border carbon adjustment (BCA), protecting domestic industries. The countries regulate emissions from commodity production with carbon taxes....

World markets are highly interlinked and local economies extensively rely on global supply and value chains. Consequently, local production disruptions, for instance caused by extreme weather events, are likely to induce indirect losses along supply chains with potentially global repercussions....

International trade policy analysis has tended to focus on the production side of general equilibrium, with policies such as a tariff or carbon tax affecting international and internal income distributions through a Heckscher-Ohlin nexus of factor intensities and factor endowments. Here I move...