The European Green Deal: transforming international trade and transportation

In this Kühne Impact Series, we analyze the effects of the European Green Deal on international trade and transportation. Our main point is that the Green Deal marks a step change in the EU’s climate policy, which will transform European trade and transportation. In particular, by strengthening the EU Emission Trading System and introducing a Carbon Border Adjustment Mechanism, it will increase the carbon price towards its social optimum. This will incentivize households and firms to buy greener products, from greener countries, using greener transportation, and thereby contribute to a more sustainable globalization. In contrast, we believe that the new green agenda in the EU’s trade policy strategy, while ambitious in spirit, is less likely to have concrete effects

The global diffusion of clean technology: China and the solar energy boom

Adopting clean energy technology is crucial for reducing emissions and achieving global climate goals. In this Kühne Impact Series, we shed light on the importance of global diffusion of clean technology through international trade. In particular, we highlight China’s expansion in the solar energy sector and its role in bringing down the cost of solar energy worldwide. Our main result is that international trade and globally integrated value chains have dramatically reduced the global average cost of renewable technologies. Keeping markets open to trade is essential for enabling a low-carbon energy transition as it ensures that all countries benefit from the lower cost of clean energy technologies. Moreover, we highlight three potential challenges that represent considerable vulnerabilities for the global diffusion of clean technology: (i) the current geographical concentration in global supply chains, (ii) the US-China and EU-China “Solar Trade War,” and (iii) the global slowdown in high-quality solar energy inventions

Globalization and Development : The Impact of International Trade on Political and Social Institutions

The Impact of Trade Liberalization in the Presence of Political Distortions Political distortions are prevalent in many developing countries and can imply substantial productivity losses. Theory is ambiguous as to whether greater openness to trade amplifies or reduces the effects of such distortions. This paper shows that trade liberalization in India decreased the value of firms' political connections, suggesting a reduction in political distortions. First, using variation in firm connections stemming from political turnover, we identify that political connections increased firm performance by 10-20%. Second, we evaluate how the value of political connections changed after India's externally imposed tariff reductions, using a triple-difference and difference-in-discontinuities design. We find that political connections became substantially less valuable when tariffs on input goods were reduced. Our findings imply that access to international markets reduces firms' dependence on political connections to source input goods, thus reducing the distortionary effect of such connections. The results suggest a new margin for gains from trade in the presence of political distortions through a direct effect of trade liberalization on the prevalence of such distortions. Importing Gender Equality Gender equality remains low in many developing countries and can partly be explained by social norms. In this paper, I investigate whether trade and, in particular import, can shift gender norms. Specifically, I study whether trading and interacting with firms in countries with higher gender equality can affect firms' gender composition in India. I construct a global industry-level index of gender equality and exploit India's trade liberalization in the 1990s to study the trade-induced increased exposure to other countries' gender norms. I find that tariff reductions increased the probability of having a female worker only for firms in industries with higher exposure to gender equality. The effect is stronger for firms in industries with higher exposure to gender equality that, to a greater extent, use relationship-specific input goods. Taken together, the results suggest that trade-induced increased exposure to other countries' gender equality can influence firms' gender composition among workers. Trade-Induced Protests: Evidence from the Brazilian Trade Liberalization This paper examines whether trade liberalization can induce shifts in citizens' willingness to mobilize and participate in protests. Specifically, I study the regional effects of Brazil's trade liberalization in the 1990s. I show that regions that were exposed to larger tariff reductions experienced a relative increase in protests. Protests increased in harder-hit regions almost immediately after the liberalization, and the effect is amplified over time. By studying potential mechanisms, I show that the surge in protests follows the pattern of the trade-induced increase in income inequality and reductions in government spending

The EU Emissions Trading System: becoming efficient

This Kühne Impact Series focuses on the EU Emissions Trading System, a cornerstone of the European Green Deal and Europe’s attempt to reach climate neutrality by 2050.1 We discuss how the system has been developed, creates a price on carbon, and the efficiency of the allocation of emissions allowances. Moreover, we analyze the evolution of the EU ETS prices and discuss the recent substantial volatility in the price of the carbon permits. The experience with the EU ETS has been mixed. However, we believe that recent and expected developments will make the system more resilient and reliable – and can ensure a credible and efficient path to carbon neutrality

Gynnar WTO:s tvistlösningsorgan utvecklingsländers handel?

Denna studie undersöker huruvida WTO:s tvistlösningsorgan bidrar till ökad handel för utvecklingsländer. Därtill presenteras även en kartläggning av utvecklingsländers deltagande i tvistlösningsorganet. Undersökningen bidrar därmed till att skapa klarhet kring ett område där forskning i stor utsträckning saknas. För att undersöka handelsutfallet till följd av tvister, har gravitationsmodellen använts. Datamaterialet är i huvudsak hämtat från WTO, UN-Comtrade samt IMF och består av 8324 observationer. I korthet finner uppsatsen inga belägg för att tvistlösningsorganet har någon inverkan på utvecklingsländers handelsvolym inom den omtvistade sektorn