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International trade and tourism in a CO₂-constrained world

Krammer, Philip; (2018) International trade and tourism in a CO₂-constrained world. Doctoral thesis (Ph.D), UCL (University College London). Green open access

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Abstract

The introduction of market-based measures to combat CO₂ emissions from international transport will affect countries with a higher dependence on international trade and tourism to a greater extent than those relying more on domestic markets. This thesis quantifies the resulting changes in real income in the trade and tourism sector in 123 countries. It consists of three main parts. The first part explores the relative price changes of operational mitigation strategies in ocean freight versus air freight, based upon a logit model that is embedded into a trade model with homogeneous firms. Results indicate that the slow steaming of ships could reduce CO₂ emissions from international trade by a significant amount (50%) and with only little impacts on welfare (-0.6%). The second part derives—in the absence of dedicated theoretical frameworks—a gravity model of international tourism. Estimating the demand model yields a price elasticity of four, which is similar to estimates in international trade. Unlike in trade however, the calculated welfare gains vary widely across countries and can be as high as 54% for small island developing states (SIDS). The third part combines the tourism model and a simplified version of the trade model into a multi-sector, multi-country general equilibrium model to examine the economic impact of a global bunker fuel levy in the international air and maritime transport industry. The resulting economic cost of reducing one tonne of CO₂ in both industries corresponds to approximately $400 in global value added. A carbon price of $150/tCO₂ could raise all of the $100 billion of global climate finance needed, while 318 Mt of transport related CO₂ could be abated cost-effectively each year. This scheme would result into a nonrecurring drop in gross world product of 0.13% and, except for SIDS and landlocked countries, be non-discriminatory against developing countries.

Type: Thesis (Doctoral)
Qualification: Ph.D
Title: International trade and tourism in a CO₂-constrained world
Event: UCL (University College London)
Open access status: An open access version is available from UCL Discovery
Language: English
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
URI: http://discovery.ucl.ac.uk/id/eprint/10041128
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