Trade in Low Carbon Technologies: The Role of Climate and Trade Policies

March 29, 2024

Preview Citation

Format: Chicago

Samuel Pienknagura. Trade in Low Carbon Technologies: The Role of Climate and Trade Policies, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Curbing carbon emissions to meet the targets set in the Paris Agreement requires the deployment of low carbon technologies (LCTs) at a global scale. This paper assesses the role of climate and trade policies in fostering LCT diffusion through trade. Leveraging a comprehensive database of climate policies and a new database identifying trade in low carbon technologies and the tariffs applied to these goods, this paper shows that the introduction of new climate policies has a positive and significant impact on LCT imports. Zooming into specific climate policies, the paper finds that, except for non-binding ones, all climate policies stimulate LCT imports. The paper also highlights the role of trade policies as an engine of LCT diffusion—reductions in tariffs applied on LCT goods have a sizeable impact on LCT imports. On the flip side, results suggest that more protectionist measures would impede the spread of low-carbon technologies.

Subject: Climate change, Climate policy, Environment, Imports, International trade, Tariffs, Taxes, Trade policy

Keywords: Climate change, Climate policies, Climate policy, Deployment of low carbon technologies, Global, Imports, LCT diffusion, LCT import, Low carbon technologies, Policy portfolio, Role of trade policies, Tariffs, Technological diffusion., Trade, Trade policy

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/075
Stock No:

WPIEA2024075
ISBN:

9798400271083
ISSN:

1018-5941

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