Event Information
The next EEU Seminar will be held on Monday the 25th of November at 12:10 – 13:00 in E43.
The seminar will be held by Julia Wahtra and he will be presenting on the topic of: Environmental Comparative Advantage and Strategic Trade. Julia is a PhD student in the Environmental Economics group at the Department of Economics, SLU. Her research centers on the intersections between agriculture and the environment, with a focus on related policies.
When: Monday, November 25th at 12:10-13:00
Location: E43 or via Zoom. [Use this link]
Speaker: Julia Wahtra
Title: Environmental comparative advantage and strategic trade
Summary: We develop a two-country Ricardian trade model with global pollution, in which one good is dirtier than the others, and show that when one of the countries has both a higher WTP for environmental quality and intrinsically cleaner production of the dirtiest good, there may be a role for subsidising that good to crowd out even dirtier production in the low-WTP country. We test this proposition by calibrating the model to trade in crops, a manufacturing good, and beef – the dirtiest good – between the EU and South America. We find that a production subsidy to the EU beef sector leads to almost non-existent welfare improvements and emissions reductions. The policy combination yielding the largest improvement (25.5 percent of the utility increase under first best) is a carbon tax combined with a border carbon adjustment and optimally chosen export rebates implemented in the EU beef sector. Optimal export rebates are higher than the social cost of carbon thus showcasing the importance of environmental comparative advantage.
Hope to see you there,
Albert Wallgren