Forslid, Rikard; Okubo, Toshihiro; Ulltveit-Moe, Karen … - 2014 - This version: May 2014
This paper develops a model of trade and CO2 emissions with heterogenous firms, where firms make abatement investments … and thereby have an impact on their level of emissions. The model shows that investments in abatements are positively … turn, lower emissions per output. We show that the overall effect of trade is to reduce emissions. Trade weeds out some of …