1 - 5 of 5
Number of results to display per page
Search Results
2. Environmental Kuznets curve and green regulation
- Author:
- Luca Bettarelli, Davide Furceri, Prakash Loungani, Jonathan D. Ostry, and Loredana Pisano
- Publication Date:
- 04-2025
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In this paper, we first test the validity of the Environmental Kuznets Curve (EKC) hypothesis, using a large sample of approximately 190 advanced and developing countries, over a period of 34 years (1989– 2022). We find that (CO2) emissions respond positively to increasing income per capita, up to a turning point of approximately US$25,000. In a departure from the previous literature, we allow the relationship between economic development and emissions to depend on the stringency of environmental regulation. Our results indicate that environmental policies—and particularly market-based instruments, such as carbon taxes and emissions trading systems—make the EKC lower and flatter. These results are robust to several sensitivity checks, and to the use of regional (rather than global) data. Overall, our results have important policy implications, as they identify economic development as a pathway to environmental improvements. Moreover, we show that environmental policies are an essential means to achieving decoupling of emissions and economic output over the longer term.
- Topic:
- Climate Change, Carbon Tax, Decoupling, and Environmental Kuznets Curve (EKC)
- Political Geography:
- Global Focus
3. What if? The Effects of a Hard Decoupling from China on the German Economy
- Author:
- Julian Baqaee, Julian Hinz, Benjamin Moll, Moritz Schularick, Feodora A. Teti, Joschka Wanner, and Sihwan Yang
- Publication Date:
- 01-2024
- Content Type:
- Policy Brief
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- How would the German economy cope with a hard economic decoupling from China? The authors study a scenario where the global economy fragments into three distinct blocs: the G7 economies and their allies, China and her allies, as well as neutral countries. German trade with China would have to be entirely rerouted to countries within the "Western" block and neutral countries. The authors quantify the costs of such a worst-case hard decoupling using the (Baqaee and Farhi 2021) multi-sector model of the world economy. The key finding is that a total cut-off of trade relations with China would have severe but not devastating effects on the German economy. The welfare loss for Germany (relative to a no-cut-off baseline) would be around 5 percent of Gross National Expenditure (GNE) over the first few months and around 4 percent over the first year, plus additional short run costs due to business-cycle amplification effects. In the medium and long run, the costs would fall to a permanent loss in the 1–2 percent range. Less extreme decoupling or gradual de-risking scenarios (“small yard, high fence") would incur smaller costs. The single most influential assumption relates to the “trade elasticity,", i.e., the ease and speed with which trade can be reorganized away from China to neutral countries and within the “Western” block. The authors´ findings, in particular the critical dependence of economic costs on the time horizon over which adjustments take place, provide some rationale for embarking on a gradual de-risking trajectory to avoid a costly and politically contentious hard decoupling dictated by geopolitical events.
- Topic:
- Globalization, International Trade and Finance, Sanctions, Geoeconomics, Decoupling, and De-Risking
- Political Geography:
- China, Asia, and Germany
4. EU-China Trade Relations: Where Do We Stand, Where Should We Go?
- Author:
- Alexander Sandkamp
- Publication Date:
- 05-2024
- Content Type:
- Policy Brief
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- • In the aftermath of the Covid-19 pandemic, China’s share in European trade has fallen continuously. Nevertheless, the country remains the EU’s largest source of imports (20.5 percent in 2023) and its third largest export destination (8.7 percent). • This apparent dominance of China is put into perspective when incorporating intra-EU trade. For example, Germany – Europe’s largest economy – sent 6.1 percent of its ex-ports to China, but 55 percent to EU members states. For imports, the Chinese and Euro-pean shares are 11.5 percent and 52.7 percent, respectively. • Decoupling the EU from China (i.e. almost eliminating bilateral trade) would permanent-ly reduce European real income by 0.8 percent in the long-run. In terms of gross domes-tic product in 2023, the EU would forego 136 billion EUR of value added every year. Short-term effects are likely to be stronger. • China dominates global production of important products such as laptops and mobile phones as well as raw materials including Germanium and Gallium that are critical for the green energy transition. A trade disruption might thus both delay the energy transi-tion and increase its costs. • To reduce specific dependencies, the EU should intensify its efforts to diversify procure-ment by increasing the attractiveness of alternative suppliers. Finding the courage to move forward in the negotiation of free trade agreements with potential strategic part-ners such as Australia and the Mercosur countries would strengthen the EU’s geopolitical position and increase prosperity among partners.
- Topic:
- Globalization, International Trade and Finance, European Union, Geoeconomics, and Decoupling
- Political Geography:
- China, Europe, and Germany
5. The Economic Impact of China PNTR Repeal
- Author:
- David Schockenhoff and Michael Kleiman
- Publication Date:
- 11-2023
- Content Type:
- Special Report
- Institution:
- Oxford Economics
- Abstract:
- As scepticism towards China is rising among policymakers, businesses grow more concerned about the potential economic fallout from an escalation in US-China tariff policy. Oxford Economics was commissioned by the US-China Business Council (USCBC) to help inform the policymaking process by examining two scenarios that could materialize if China’s Permanent Normalized Trade Relations (PNTR) status was revoked – including the increase of US tariffs on Chinese goods to column 2 rates as well as a Chinese retaliation imposing pre-WTO rates on US goods. Our analysis incorporates state-of-the art trade and economic models, including the Oxford Economics GEM, and finds that the US could lose up to $1.9trn in output over the five-year period following a China PNTR repeal. This is our third study for USCBC after examining the impact of the US-China relationship and associated scenarios in two previous reports (2017 and 2021).
- Topic:
- Economics, Politics, Bilateral Relations, Regulation, Tariffs, Trade, Supply Chains, Policymaking, Decoupling, and Goods and Services
- Political Geography:
- China, Asia, North America, and United States of America