Assessment of environmental impacts embodied in U.S.-China and U.S.-India trade and related climate change policies

The interaction between international trade and the environment has become an increasingly important topic in both the academic literature and policy analysis. Carbon leakage could occur if US GHG emission reductions resulting from a strict domestic climate policy cause an increase in GHG emissions in developing countries. The US, China, and India are among the world's largest emitters of GHGs. China overtook the US to become the number one emitter in 2006, which can be largely attributed to its rapid economic growth, coal-dominated energy structure, and increasing exports. A number of recent studies have examined the carbon dioxide emissions embodied in China's exports and have estimated their contribution to Chinese and world carbon dioxide emissions. Economic analysis of BCAs has been conducted by various authors. The majority of these studies use multi-sector static general equilibrium models to quantify the extent of these policy options.