Trade sanctions and the stability of climate coalitions
Open accessAbstract
We investigate whether trade sanctions against outsiders can foster climate cooperation in self-enforcing international environmental agreements if outsiders retaliate. We find a threshold effect: In small coalitions incentives to be a coalition member decrease whereas in large coalitions they increase. Thus, trade sanctions can be an effective tool in climate policy only after a sufficiently large climate coalition has already been formed. Even if larger stable coalitions are achieved with trade sanctions, implications for global welfare can be adverse, because additional trade distortions trade off with the environmental gains. We identify the USA and Europe as essential members of stable coalitions if outsiders retaliate.
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Recent economic analyses show that the additional consideration of retaliation significantly reduces the appeal of import adjustments as a means to expand climate coalitions and may even risk a detrimental trade war.
“Recent economic analyses show that the additional consideration of retaliation significantly reduces the appeal of import adjustments as a means to expand climate coalitions and may even risk a detrimental trade war 79,80 .”
From Potential impacts and challenges of border carbon adjustments (2022) · cites this paper as [80]
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Potential impacts and challenges of border carbon adjustments
Böhringer, C., Fischer, C., Rosendahl, K. E., & Rutherford, T. F. (2022) · Nature Climate Change · doi:10.1038/s41558-021-01250-z · Cited by 292 · see citing works
- Authors
- Hagen, A., & Schneider, J.
- Affiliations
- Berlin School of Economics and Law (DE)
- Carl von Ossietzky Universität Oldenburg (DE)
- Corresponding author
- Schneider, Jan
- Venue
- Journal of Environmental Economics and Management
- Publisher
- Elsevier BV
- Published
- 2021-09
- Volume
- 109
- Pages
- 102504
- ISSN
- 0095-0696 (ISSN-L)
- OpenAlex
- W3178970197
- Cited by
- 29
- References
- 1
- Citations by year
- 2026: 4 · 2025: 3 · 2024: 6 · 2023: 6 · 2022: 8 · 2021: 1 · 2020: 1
- FWCI
- 4.01
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Journal of Environmental Economics and Management (publishedVersion, cc-by)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Bundesministerium für Bildung und Forschung (01LA1811C, 01LA1816B)
- Bundesministerium für Bildung und Forschung Dienststelle Berlin
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Physical Sciences › Environmental Science › Management, Monitoring, Policy and Law › International Environmental Law and Policies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Energy, Environment, Economic Growth
- Keywords
- trade sanctions, climate coalitions, climate change cooperation, retaliation, coalition stability, threshold effects, coalition size, trade distortions, global welfare, climate policy
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