Climate Change, Climate Policy, and Trade

This chapter introduces research at the intersection of international trade and climate change. We begin by presenting key empirical patterns that underscore the importance of trade in climate change economics, along with the main modeling tools used to study trade-climate interactions. We then synthesize a large body of related research, distill the main takeaways, and suggest promising directions for future work. Our discussion is organized around three themes – mitigation, adaptation, and innovation – examining how trade policy can reduce greenhouse gas emissions, help countries adapt to the adverse consequences of climate change, and shape the diffusion of green technologies.