Trade Green

The TRADEGREEN project examines public policies aiming at reconciling international trade with our environment: the carbon border adjustment mechanism (CBAM), subsidies on decarbonated technologies, and environmental provisions in trade agreements. The first two policies reduce carbon leakage. The CBAM can be combined with free emission allowances, with export rebates, or with public investment in technological change. The impact and efficiency of these instruments are investigated in an economic model in which international trade and firms’ investment in decarbonated technologies are endogenous. The model is calibrated on European data to obtain estimates. TRADEGREEN aims at improving our understanding of environmental and trade policies, and quantifying their impact on economics, trade, and our planet.