1681. The Consequences of Unilateral Withdrawals from the Paris Agreement
- Author:
- Mario Larch and Joschka Wanner
- Publication Date:
- 11-2022
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- International cooperation is at the core of multilateral climate policy. How is its effectiveness harmed by individual countries dropping out of the global mitigation effort? We develop a multisector structural trade model with emissions from production and a constant elasticity of fossil fuel supply function to simulate the consequences of unilateral withdrawals from the Paris Agreement. Taking into account both direct and leakage effects, we őnd that a US withdrawal would eliminate more than a third of the world emissions reduction (31.8% direct effect and 6.4% leakage effect), while a potential Chinese withdrawal lowers the world emission reduction by 24.1% (11.9% direct effect and 12.2% leakage effect). The substantial leakage is primarily driven by technique effects induced by falling international fossil fuel prices.
- Topic:
- Climate Change, International Trade and Finance, Fossil Fuels, Carbon Emissions, and Paris Agreement
- Political Geography:
- Global Focus and United States of America