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Green industrial policy : trade and theory

Author:	Karp, Larry; Stevenson, Megan;	Collection Title:	Policy Research working paper ; no. WPS 6238
Country:	Brazil; United States; World; China;	Date Stored:	2012/10/22
Document Date:	2012/10/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	The World Region; Rest Of The World; East Asia and Pacific; Latin America & Caribbean
Report Number:	WPS6238	SubTopics:	Environmental Economics & Policies; Energy Production and Transportation; Climate Change Economics; Climate Change Mitigation and Green House Gases; Economic Theory & Research
Volume No:	1 of 1

Summary: This paper studies the reality and the potential for green industrial policy. It provides a summary of the green industrial policies, broadly understood, for five countries. It then considers the relation between green industrial policies and trade disputes, emphasizing the Brazil-United States dispute involving ethanol and the broader United States-China dispute. The theory of public policy provides many lessons for green industrial policy. The authors highlight four of these lessons, involving the Green Paradox, the choice of quantities versus prices with endogenous investment, the coordination issues arising from emissions control, and the ability of green industrial policies to promote cooperation in reducing a global public bad like carbon emissions.


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