Greening Ricardo: environmental comparative advantage and the environmental gains from trade

Puntos clave

• The research aims to investigate how a carbon tax can enhance environmental benefits through trade specialization.
• Utilized a quantitative trade model to analyze the impact of climate policy.
• Examined the relationship between carbon tax rates and environmental gains from trade.
• Assessed the reduction in greenhouse gas emissions associated with carbon taxation.
• Environmental gains from trade contribute approximately one-third of total emissions reductions from carbon tax.
• The findings are consistent across various carbon tax rates and coverage levels.