UiS Business School Seminar: Multinational Production, Trade, and Carbon Emissions

Abstract:

International economic integration is increasingly characterized by multinational production. The environmental implications of this shift are unclear as different forms of multinational activity affect emissions in different ways, both for production and transportation. Multinational production may reduce pollutants by transferring cleaner technology abroad or exacerbate pollution by outsourcing dirtier production to foreign countries with pollution-intensive technologies. In terms of transportation emissions, multinational production may substitute trade, reducing the emissions from shipping or enhancing trade and accelerating pollution from transportation. We provide the first quantitative general equilibrium framework that brings together multinational production, international trade, and carbon emissions from production and transportation. As the available data on multinational production and emission does not fully identify the link between multinational activity and emissions, we consider the range of calibrated models compatible with the data and accordingly report result intervals for all counterfactual scenarios considered. Using the model and the calibration strategy, we quantify the role of multinational production on emissions. We compare the current emissions and the counterfactual emissions in autarky. We show that at the maximum, emissions in autarky are 18\% higher than in the current economy, suggesting that the role of multinational production on emission is non-negligible. We further derive the emissions from counterfactual policies affecting multinational production and trade.

Zoom: https://stavanger.zoom.us/j/65342873516?pwd=VzVVbkh1S1UySGFWSHZaVEtqN09zQT09#success

Meeting-ID: 653 4287 3516

Password: 596698