Forslid, Rikard; Okubo, Toshihiro; Ulltveit-Moe, Karen … - CESifo - 2014
This paper develops a model of trade and CO2 emissions with heterogenous firms, where firms make abatement investments … turn, lower emissions per output. We show that the overall effect of trade is to reduce emissions. Trade weeds out some of … to more productive and cleaner exporters. The overall effect of trade is therefore to reduce emissions. We test empirical …