International Environmental Economics
Paper Session
Friday, Jan. 7, 2022 3:45 PM - 5:45 PM (EST)
- Chair: Joseph S. Shapiro, University of California-Berkeley
The Carbon Footprint of Multinational Production
Abstract
How does multinational production affect climate change? The Paris Agreement on Climate Change sets the goal of $100 billion in transfers per year from rich to poor countries to support climate change mitigation. Two stylized facts suggest that multinational production provides one potential avenue for these large transfers. First, different countries have substantially different CO2 emissions per dollar of value added or output, even conditional on industrial composition. Second, firms appear to bring clean technology with them when operating abroad--an affiliate's emissions strongly covary with the emission rate of its home country, even relative to other firms in the same host country and industry. We describe and calibrate a multi-country and multi-industry model of trade, multinational production, and energy to assess how policies that encourage additional multinational production would affect global CO2 emissions and welfare.International Climate Agreements and the Scream of Greta
Abstract
The world appears to be in imminent peril, as countries are not doing enough tokeep the Earth's temperature from rising to catastrophic levels, and various attempts at
international cooperation have failed. Why is this problem so intractable? Can we expect
an 11th-hour solution? Will some countries, or even all, succumb on the equilibrium path?
We address these questions through a formal model that features the possibility of climate
catastrophe and emphasizes the role of two critical issues: the international externalities
that a country's policies exert on other countries, and the intertemporal externalities that
current generations exert on future generations. We examine the interaction between
these two issues and explore the extent to which international agreements can mitigate
the problem of climate change in their presence.
Improved Transportation Networks Facilitate Adaptation to Pollution and Temperature Extremes
Abstract
The social costs of air pollution and climate change critically hinges on humans’ ability to adapt. Based on high-resolution transaction records from the world’s largest payment network, this research shows China's rapid expansion of high-speed-railways and air-travel networks facilitates intercity travels as an adaptation strategy. On average, high-speed-rail and air-travel expansion has reduced travelers' exposure to extreme pollution by 16% and extreme temperatures by 15%, with a larger effect when home cities experience worse conditions. Up to 50% of reductions in pollution exposure and 78% of reductions in temperature exposure are driven by mechanical effects (a by-product of increased travel distance and expansion of destinations), with the remaining benefits accounted by behavioral changes of traveling to destinations with a better environment in response to adverse conditions at home.Discussant(s)
Mar Reguant
,
Northwestern University
Samuel Kortum
,
Yale University
Scott Barrett
,
Columbia University
Matthew Turner
,
Brown University
JEL Classifications
- Q5 - Environmental Economics
- F0 - General