Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290029 
Year of Publication: 
2022
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-01378
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
The dire prospects of global warming have been increasing the pressure on policymakers to use trade policy as a mitigation tool, challenging trade economists' canonical "targeting principle." Even though the justifications for this stance remain as valid as ever, it no longer seems feasible in a world that is already engaging actively in using trade policy for climate purposes. However, the search for second-best solutions remains warranted. In this paper, we focus on the climate benefits of tariff reform for a broad sample of Latin American and Caribbean countries, drawing on Shapiro's (2021) insights about the environmental bias of trade policy. Using a partial equilibrium approach and GTAP 10-MRIO data for 2014, we show that even though there is evidence of a negative bias toward "dirty goods" in half of the countries studied, translating this into actionable tariff reforms is plagued by interpretation and implementation difficulties, as well as by jurisdictional and efficiency trade-offs. There are also questions about their efficacy in curbing greenhouse gas emissions.
Subjects: 
Trade Policy
International Trade
Climate Change
Latin America andthe Caribbean
JEL: 
F13
F14
F18
H23
Q56
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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