Climate Policies: Trade Spillovers, Joint Implementation and Technological Spillovers, Market Power, Investment Risks

  • Christoph Böhringer
  • Andreas Löschel
Part of the ZEW Economic Studies book series (ZEW, volume 26)


Policy interventions in large open economies not only affect the allocation of domestic resources but also change international market prices. The change in international prices implies an indirect (secondary) effect for all trading countries. This secondary terms-of-trade effect may have important policy implications. For example, international environmental agreements should account for induced changes in terms of trade when searching for ‘equitable’ burden sharing schemes. Section 1.1 presents a decomposition that splits the total effect of policy changes on individual countries into a domestic market effect holding international prices constant and an international market effect as a result of changes in international prices. Splitting the total effect into these components conveys important economic information as to why a country will benefit or lose from adjustments in domestic and international markets.


Clean Development Mechanism Climate Policy Kyoto Protocol Abatement Cost Emission Trading 


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Copyright information

© Springer-Verlag Berlin Heidelberg 2004

Authors and Affiliations

  • Christoph Böhringer
    • 1
  • Andreas Löschel
    • 1
  1. 1.Centre for European Economic ResearchMannheimGermany

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