Green Industrial Policy : Trade and Theory

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.

Bibliographic Details

Main Authors:	Karp, Larry, Stevenson, Megan
Language:	English en_US
Published:	World Bank, Washington, DC 2012-10
Subjects:	ABATEMENT, ABATEMENT COSTS, ABSORPTION, AGGREGATE DEMAND, AGGREGATE EMISSIONS, AGGREGATE LEVEL, ALLOWANCE, ALTERNATIVE ENERGY, ALTERNATIVE FUELS, AMOUNT OF ABATEMENT, AMOUNT OF EMISSIONS, APPROACH, ARBITRAGE, ASYMMETRIC INFORMATION, AVAILABILITY, AVERAGE PRODUCTION COSTS, BALANCE, BIOGAS, BIOMASS, BIRDS, CALCULATION, CAP AND TRADE POLICY, CARBON, CARBON EMISSIONS, CARBON ENERGY, CARBON POLICIES, CARBON STOCKS, CARBON TAX, CARBON TAXES, CLIMATE, CLIMATE CHANGE, CLIMATE CHANGE MITIGATION, CLIMATE SYSTEM, CLOUDS, CO, CONSUMERS, CORN PRICES, COST OF ABATEMENT, DAMAGES, DEBT, DEFORESTATION, DEMAND FOR ETHANOL, DEVELOPED COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DISCOUNT RATE, DISCOUNTED VALUE, DUMPING, DYNAMIC MODEL, ECONOMIC BENEFITS, ECONOMIC THEORY, ECONOMIES OF SCALE, ECONOMISTS, ELECTRICITY, ELECTRICITY GENERATION, EMISSIONS, EMISSIONS CONTROL, EMISSIONS POLICY, EMISSIONS REDUCTION, EMISSIONS TAXES, EMPIRICAL EVIDENCE, ENERGY DEMAND, ENERGY ECONOMICS, ENERGY POLICIES, ENERGY POLICY, ENERGY SOURCE, ENERGY SOURCES, ENERGY SUPPLY, ENERGY USE, ENVIRONMENTAL, ENVIRONMENTAL CONSEQUENCES, ENVIRONMENTAL COSTS, ENVIRONMENTAL DAMAGES, ENVIRONMENTAL ECONOMICS, ENVIRONMENTAL ECONOMISTS, ENVIRONMENTAL POLICY, ENVIRONMENTAL PROBLEM, ENVIRONMENTAL PROBLEMS, ENVIRONMENTAL REGULATION, EQUILIBRIUM, ETHANOL, ETHANOL IMPORTS, ETHANOL IN GASOLINE, ETHANOL INDUSTRY, ETHANOL PRODUCTION, ETHANOL TAX CREDIT, EXCHANGE RATE, EXPECTED VALUE, EXPORTS, EXTERNALITIES, EXTERNALITY, FARMS, FISCAL POLICIES, FIXED COSTS, FOREIGN COMPETITION, FOSSIL, FOSSIL FUEL, FOSSIL FUELS, FUEL CONSUMPTION, FUEL COSTS, FUEL PRICE, FUEL PRICES, FUNCTIONAL FORMS, FUTURE PRICES, GASOLINE, GASOLINE CONSUMPTION, GHG, GHGS, GLOBAL WARMING, GREEN ENERGY, GREENHOUSE, GREENHOUSE GAS, GREENHOUSE GAS EMISSIONS, GREENHOUSE GASSES, HEAT, HEATING SYSTEMS, HOT WATER, HYDROPOWER, IMPORTS, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INTERNATIONAL TRADE, INVESTMENT DECISIONS, INVESTMENT OPPORTUNITIES, IPCC, KILOWATT HOUR, LOW TARIFFS, LOW-CARBON, MARGINAL ABATEMENT, MARGINAL ABATEMENT COST, MARGINAL ABATEMENT COSTS, MARGINAL COST, MARGINAL COSTS, MARGINAL DAMAGE FUNCTION, MARKET ECONOMY, MARKET FAILURE, MARKET FAILURES, METHANE, NASH EQUILIBRIUM, NATURAL GAS, NONRENEWABLE RESOURCE, NUCLEAR POWER, OIL PRICES, OLIGOPOLY, OPPORTUNITY COST, ORGANIC WASTE, OSCILLATIONS, PERFORMANCE STANDARDS, PERMIT TRADING, PHOTOVOLTAICS, POLICY ADVICE, POLICY MAKERS, POLICY RELEVANCE, POLICY SCENARIO, POLLUTION, POLLUTION CONTROL, POLLUTION TAX, PORTFOLIO, POSITIVE EXTERNALITIES, POSITIVE EXTERNALITY, POWER PLANTS, PP, PREDATORY PRICING, PRICE INCREASES, PRICE OF OIL, PRIVATE INFORMATION, PRIVATE MARGINAL COST, PRODUCER PRICE, PRODUCERS, PRODUCTION COSTS, PROTECTIONISM, PUBLIC GOOD, QUOTAS, REDUCING EMISSIONS, REGULATORY CAPTURE, RENEWABLE ELECTRICITY, RENEWABLE ENERGY, RENEWABLE ENERGY POLICY, RENEWABLE ENERGY SOURCES, RENEWABLE ENERGY TECHNOLOGY, RENEWABLE FUELS, RENEWABLE PORTFOLIO STANDARDS, RENEWABLE POWER, RENEWABLE SOURCES, RESOURCE ECONOMICS, RETURNS TO SCALE, RURAL COMMUNITIES, RURAL ELECTRIFICATION, SCENARIOS, SOLAR INSTALLATION, SOLAR POWER, SOLAR WATER HEATERS, SOLAR WATER HEATING, SOLAR WATER HEATING SYSTEMS, SPOT MARKET, STATISTICAL ANALYSIS, SUNK COSTS, SUNLIGHT, SUPPLY CURVE, SUPPLY SIDE, SUSTAINABLE DEVELOPMENT, TAX CREDIT, TAX CREDITS, TAX INCENTIVE, TAX INCENTIVES, TOTAL COST, TRADE BALANCE, TRADE DISPUTES, TRADING PARTNERS, TRADITIONAL ECONOMIES, TROUGH, UNEMPLOYMENT, WAGES, WIND, WIND CAPACITY, WIND FARMS, WIND POWER, WIND PROJECTS, WTO,
Online Access:	http://documents.worldbank.org/curated/en/2012/10/16863764/green-industrial-policy-trade-theory https://hdl.handle.net/10986/12081
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