Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307097 
Year of Publication: 
2024
Citation: 
[Journal:] European Economic Review [Volume:] 163 [Article No.:] 104699 [Publisher:] Elsevier BV [Place:] Amsterdam, NL [Year:] 2024 [Pages:] 1-18
Publisher: 
Elsevier BV, Amsterdam, NL
Abstract: 
International cooperation is at the core of multilateral climate policy. How is its effectiveness harmed by individual countries not participating in the global mitigation effort? We use a multi-sector structural trade model with carbon emissions from production and a constant elasticity of fossil fuel supply function to simulate the consequences of unilateral non-participation in the Paris Agreement. Taking into account both direct and leakage effects, we find that non-participation of the US would eliminate more than a third of the world emissions reduction (31.8% direct effect and 6.4% leakage effect), while a potential non-participation of China lowers the world emission reduction by 24.1% (11.9% direct effect and 12.2% leakage effect). The substantial leakage is primarily driven by technique effects induced by falling international fossil fuel prices. In terms of welfare, the overwhelming majority of countries gain from the implementation of the Paris Agreement and most countries have only very little to gain from unilaterally deciding not to participate.
Subjects: 
Climate change
International trade
Carbon leakage
Fossil fuel supply
JEL: 
F14
F18
Q56
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.