Sato, Misato 
ORCID: 0000-0002-9978-9595 and Dechezlepretre, Antoine
(2015)
Asymmetric industrial energy prices and international trade.
CEP discussion paper (1337).
Centre for Economic Performance, LSE, London, UK.
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Abstract
This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and covering 60% of global merchandise trade, we estimate the short-run effects of sector-level energy price asymmetry on trade. We find that changes in relative energy prices have a statistically significant but very small impact on imports. On average, a 10% increase in the energy price difference between two country-sectors increases imports by 0.2%. The impact is larger for energy-intensive sectors. Even in these sectors however, the magnitude of the effect is such that changes in energy price differences across time explain less than 0.01% of the variation in trade flows. Simulations based on our model predict that a †40-65/tCO2 price of carbon in the EU ETS would increase Europe’s imports from the rest of the world by less than 0.05% and decrease exports by 0.2%.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://cep.lse.ac.uk/ |
| Additional Information: | © 2015 The Authors |
| Divisions: | Grantham Research Institute Centre for Economic Performance |
| Subjects: | G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HF Commerce H Social Sciences > HG Finance |
| JEL classification: | F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade F - International Economics > F1 - Trade > F18 - Trade and Environment Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting; Environmental Equity |
| Date Deposited: | 19 Mar 2015 11:28 |
| Last Modified: | 01 Apr 2024 07:58 |
| Projects: | CEP Productivity Programme |
| Funders: | Economic and Social Research Council |
| URI: | http://eprints.lse.ac.uk/id/eprint/61278 |
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