Working Papers

"Optimal Carbon Tariffs, Retaliation and Trade Wars in the Paris Agreement" (under review)

  • Using a general equilibrium trade model with cross-border pollution externalities from production, I evaluate the potential for carbon tariffs as an instrument to enforce the commitments under the Paris Agreement. Employing a non-cooperative optimal policy framework, I investigate the strategic interactions across five regions, Canada, China, the European Union, the United States and the rest of the world. In light of the debates following the possible withdrawal of the United States from the Paris Agreement, the analysis specifically focuses on the effects of welfare-maximising carbon tariffs on imports from the United States. I find that optimal carbon tariffs at the industry level result in small reductions in the total emissions and real income of the United States but are not sufficient to enforce participation in emission mitigation efforts. Compared to meeting its emission reduction targets, the United States is better off by withdrawing from the Paris Agreement, bearing the cost of carbon tariffs and retaliating in response. The committing regions are worse off when the United States retaliates. The results show that the negative effects of a worldwide tariff war on real incomes are substantially larger than the compliance cost to the Paris Agreement for all regions.

"Pricing Carbon in Canada: An Analysis of Canada's Commitment under the Paris Agreement" (under review)

  • I present an analysis of Canada's commitments under the Paris Agreement by examining the effects of meeting the emission reduction targets as described in Canada's Nationally Determined Contribution on welfare, bilateral trade and carbon leakage at the provincial and national level. To do this, I incorporate pollution emissions as a by-product of production into a general equilibrium trade model. Provinces substantially vary in terms of their economic structures and emissions profiles, therefore the effects of a national environmental policy differ at the regional level. By considering interprovincial trade and linkages across industries, the results provide a comprehensive understanding of how the industry level effects of a national target are transmitted through the Canadian economy and inform the policy in terms of the “emission intensive and trade exposed” industries at the provincial level.

"Welfare Implications of the 19th Century Trade Liberalization in Britain" (under review)

  • I examine Britain’s trade policy in the 19th century. Britain, the dominant trading nation of the time, abolished protectionist import tariffs in the middle of the century. To quantify the effect of this shift in trade policy on Britain’s welfare, I employ a general equilibrium trade model with multiple industries and input-output linkages. Relying on a novel dataset of trade flows and import tariffs of Britain and its main trading partners, I show that trade liberalization improved Britain’s overall welfare. This result is driven by the increased volume of trade. Although its terms of trade deteriorated, Britain benefited as its tariff structure became less restrictive over the period.

"Geopolitical Implications of the EU's Carbon Border Adjustment Mechanism" (with Katharina Koch and Jennifer Winter) (under review). Book chapter in Changing the Paradigm of Energy Geopolitics: resources and pathways in the light of global climate challenges, João Simões, Francisco Leandro, Eduardo Caetano de Sousa, Roopinder Oberoi, eds.

  • Carbon tariffs, although complicated and costly to design and implement, reduce carbon leakage, shift the cost of abatement partly from countries with high carbon taxes to ones with low (or no) carbon taxes, and reduce competitiveness pressures on emissions-intensive and trade-exposed industries in high carbon-tax countries. Following this rationale and to level the carbon playing field, the European Union (EU) announced its proposal for the Carbon Border Adjustment Mechanism (CBAM) in 2019 as part of the European Green Deal. Once it takes effect in 2026, the CBAM will be the first initiative of its kind. This chapter conceptualizes the CBAM as soft power diplomacy with which the EU attempts to generate policy reforms in third countries by imposing carbon tariffs and related incentives. Furthermore, the limited sectoral coverage reveals the dynamics of the EU’s normative power on climate policy and the influence of its climate policy on the international system. The main research question is how the CBAM may influence geopolitical relations between the EU and its main trade partners.

"Tracking Canada's Nation-Building Efforts through Infrastructure Development" (with Katharina Koch) (under review).

  • Infrastructure development has been an important element of Canada’s nation-building process. Major infrastructure projects from Canadian history, such as the Trans-Canada Highway, are often referred to as “nation building” in various federal infrastructure frameworks. These large-scale infrastructure projects have gradually become remnants of the past in Canada as federal governments turned focus to local and community-level projects. However, independent of scale, federal governments still use “nation-building infrastructure” as a term to present and define the purpose of new infrastructure development frameworks. In this first attempt to trace nation building through Canada’s infrastructure policy in the 21st century, we adopt a relational approach to territory and show that Canada's federal governments have implemented infrastructure policy in a relational way during the investigated period as it involved all levels of government, the private sector and the Indigenous rights holders. Hence, a federal nation-building agenda moved forward through infrastructure policy can be understood from a relational perspective.

"Environmental and Socio-Economic Impacts of Northwest Territories' Inuvik to Tuktoyaktuk Highway" (with G. Kent Fellows and Jennifer Winter)

  • Highway 10, more commonly known as the Inuvik-Tuktoyaktuk Highway, is the first all-weather road to Canada's Arctic Coast and replaced a seasonal winter road, which was annually constructed across the frozen Mackenzie River delta channels and the frozen Arctic Ocean. In this paper, we investigate the socio-economic effect of Highway 10 using hedonic valuation methods based on simple statistical analysis. The value of the highway is the reduction in “remoteness” or increase in “agglomeration” for Tuktoyaktuk and by extension, the resulting changes to social and economic outcomes implied by this reduced remoteness and increased agglomeration.