Carbon Pricing Has a Minimal Effect on Competitiveness: British Study

Asymmetric Industrial Energy Prices and International Trade
Centre for Climate Change Economics and Policy | Grantham Research Institute on Climate Change and the Environment / by Misato Sato and Antoine Dechezleprêtre

In a paper with a title that is sure to get your pulses racing – Asymmetric industrial energy prices and international trade  they tried to quantify the extent to which differences in energy prices might drive bilateral trade flows between countries. The authors of the paper, Dr Misato Sato and Dr Antoine Dechezleprêtre, analysed 62 business and industry sectors in 42 countries over a 15-year period, using data that covers 60% of global merchandise trade.

They found that energy prices:

“…explain less than 0.01 per cent of the variation in trade flows, suggesting that differences in energy prices are a marginal driver of trade globally.”

Even in energy-intensive sectors, they found changes in energy prices explain less than 0.01% of the variation in exports and imports over the past 15 years…


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