Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 32468
Scale, Technique and Composition Effects of CO2 Emissions under Trade Liberalization of EGS: A CGE Evaluation for Argentina

Authors: M. Priscila Ramos, Omar O. Chisari, Juan Pablo Vila Martínez


Current literature about trade liberalization of environmental goods and services (EGS) raises doubts about the extent of the triple win-win situation for trade, development and the environment. However, much of this literature does not consider the possibility that this agreement carries technological transmissions, either through trade or foreign direct investment. This paper presents a computable general equilibrium model calibrated for Argentina, where there are alternative technologies (one dirty and one clean according to carbon emissions) to produce the same goods. In this context, the trade liberalization of EGS allows to increase GDP, trade, reduce unemployment and improve the households welfare. However, the capital mobility appears as the key assumption to jointly reach the environmental target, when the positive scale effect generated by the increase in trade is offset by the change in the composition of production (composition and technical effects by the use of the clean alternative technology) and of consumption (composition effect by substitution of relatively lesspolluting imported goods).

Keywords: CGE modeling, CO2 emissions, composition effect, scale effect, technique effect, trade liberalization of EGS.

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1772


[1] A. Vikhlyaev, “Environmental goods and services: defining negotiations or negotiating definitions,” J. World Trade, vol. 38, p. 93, 2004.
[2] M. Kennett and R. Steenblik, Environmental goods and services: A synthesis of country studies. OECD Publishing, 2005.
[3] W. T. O. (WTO)., “Doha ministerial declaration (wt/min(01)/dec/1, paragraph 31),” November 2001. (Online). Available: http://www.wto. org/english/thewto e/minist e/min01 e/mindecl e.htm
[4] D. Laborde and C. Lakatos, “Market access opportunities for acp countries in environmental goods,” Gen`eve: International Centre for Trade and Sustainable Development.(ICTSD Programme on Trade and Environment, Issue paper no. 17.), 2012.
[5] M. P. Ramos, “The impact of trade liberalization of environmental products on welfare, trade, and the environment in argentina,” UNCTAD Virtual Institute Project for Trade and Poverty, Tech. Rep., 2014.
[6] J. de Melo, “Moving on towards a workable climate regime,” CEPR Discussion Paper, no. DP11781, January 2017.
[7] A. Kitous, K. Keramidas, T. Vandyck, B. Saveyn et al., “Global energy and climate outlook (geco 2016) road from paris,” Joint Research Centre (Seville site), Tech. Rep., 2016.
[8] O. O. Chisari and S. J. Miller, “CGE Modeling: The Relevance of Alternative Structural Specifications for the Evaluation of Carbon Taxes’ Impact and for the Integrated Assessment of Climate Change Effects: Simulations for Economies of Latin America and the Caribbean,” Inter-American Development Bank, Tech. Rep., 2015.
[9] W. A. Brock and M. S. Taylor, “Economic growth and the environment: a review of theory and empirics,” Handbook of economic growth, vol. 1, pp. 1749–1821, 2005.
[10] C. B¨ohringer and T. F. Rutherford, “Transition towards a low carbon economy: A computable general equilibrium analysis for Poland,” Energy Policy, vol. 55, pp. 16–26, 2013.
[11] C. B¨ohringer, T. F. Rutherford, D. G. Tarr, and N. Turdyeva, “Market Structure and the Environmental Implications of Trade Liberalization: Russia’s Accession to the World Trade Organization,” Review of International Economics, vol. 23, no. 5, pp. 897–923, 2015.
[12] G. Allan, P. McGregor, and K. Swales, “Greening regional development: employment in low-carbon and renewable energy activities,” Regional Studies, pp. 1–11, 2016.