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PRWP

Reproducibility package for Trade, Outsourcing, and the Environment

2024
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Reference ID
RR_WLD_2023_57-v01
DOI
https://doi.org/10.60572/dmb1-ef23
Author(s)
Erhan Artuc, Konstantin Sommer
Collections
World Bank Policy Research Working Papers
Metadata
JSON
Created on
Jan 09, 2024
Last modified
Feb 29, 2024
  • Project Description
  • Downloads
  • Overview
  • Reproducibility Package
  • Description
  • Scope and coverage
  • Disclaimer
  • Access and rights
  • Contacts
  • Information on metadata
  • Citation
  • Overview

    Abstract

    This paper analyzes the effects of carbon taxation and border carbon adjustments in a setting where firms can choose to respond to taxation by abating or by outsourcing part of their production. For this, this paper sets up a general equilibrium trade model, calibrated with world trade and input-output data that features a discrete choice production structure, where the producers choose between outsourcing or abating emission-intensive intermediate production steps. The paper finds that border adjustments that cannot target scope 3 emissions can lead to outsourcing, and thus leakage, further down the value chain, but nevertheless induce higher abatement both in the countries that impose the border adjustment and in the ones affected by it.

    Reproducibility Package

    Scripts
    Readme Get Reproducibility Package
    Link: https://reproducibility.worldbank.org/index.php/catalog/98/download/252/README.pdf
    Reproducibility package (partial data and code) for Trade, Outsourcing and the Environment
    Title
    Reproducibility package (partial data and code) for Trade, Outsourcing and the Environment
    Date
    2024-01
    Description
    The code in this folder generates the tables and figures in the paper "Trade, Outsourcing and the Environment" by Erhan Artuc and Konstantin Sommer
    Dependencies
    Stata: All dependencies are stored in the ado folder. R: All dependencies are stored in the R environment. Matlab: Dependencies are listed in the README file and code.
    Instructions
    See README in reproducibility package.
    Notes
    Computational reproducibility verified by Development Impact (DIME) Analytics team, World Bank.
    Source code repository
    Repository name URI
    Reproducible Research Repository (World Bank) https://reproducibility.worldbank.org
    Software
    R
    Name
    R
    Version
    4.3.2
    Stata
    Name
    Stata
    Version
    17
    Matlab
    Name
    Matlab
    Version
    R2023a

    Reproducibility

    Technology environment

    The code was reproduced on two computers with the following specifications:

    1. Computer 1: Stata and R
      – OS: Windows 11 Enterprise
      – Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz
      – Memory available: 15.7 GB
      – Software version: Stata version 17, R version 4.3.2
    2. Computer 2: Matlab
      – OS: Windows 10 Enterprise
      – Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz
      – Memory available: 32 GB
      – Software version: R2023a
    Technology requirements

    ~3-hour runtime

    Reproduction instructions

    To run the script, new users only need to change the directory of the Main do file and R script and run the code.

    Data

    Datasets
    World Input-Output Database (WIOD)
    Name
    World Input-Output Database (WIOD)
    Note
    Located at: data/raw/WIOTS_in_R The authors used the 2016 release and the "WIOT tables in R" as well as the Environmental Satelite accounts, both downloadable from the link below. The file names remain as downloaded, and one needs to unpack the folders AIR and EM into the same folder as the IO data. The files should be placed under "/data/raw/WIOTS_in_R". Source: Groningen Growth and Development Centre. Faculty of Economics and Business
    Access policy
    Published with package.
    Data URL
    https://www.rug.nl/ggdc/valuechain/wiod/wiod-2016-release
    EORA Global Supply Chain database
    Name
    EORA Global Supply Chain database
    Note
    Located at: data/raw/EORA26_2009 The authors use the EORA 26 basic prices version from 2009, available at the link below. One needs to create a free account to download the data. File names remain as downloaded. The data should be placed under “data/raw/EORA26_2009”. Source: Lenzen, M., Moran, D., Kanemoto, K., Geschke, A. (2013) Building Eora: A Global Multi-regional Input-Output Database at High Country and Sector Resolution. Economic Systems Research, 25:1, 20-49, DOI:10.1080/09535314.2013.769938
    Access policy
    The data is public but restricted from republishing, hence it is not included in the package.
    Data URL
    https://worldmrio.com/eora26
    OECD Environmental Tax Revenue data
    Name
    OECD Environmental Tax Revenue data
    Note
    Located at: data/raw/OECD/env_tax_rev/ERTR_31012023222956399.csv One can download the environmental tax data from the link below. The data should be placed under “data/raw/OECD/env_tax_rev/” Source: OECD.
    Access policy
    The data is public but restricted from republishing, hence it is not included in the package.
    Data URL
    https://stats.oecd.org/Index.aspx?DataSetCode=ERTR
    OECD Exchange Rates data
    Name
    OECD Exchange Rates data
    Note
    Located at: data/raw/OECD/x_rates/x_rates.csv The authors use the OECD exchange rates towards the US dollar, which can be downloaded from the following link. The file is renamed to “x_rates.csv”, and should be placed under “data/raw/OECD/x_rates/”. Source: OECD.
    Access policy
    The data is public but restricted from republishing, hence it is not included in the package.
    Data URL
    https://data.oecd.org/conversion/exchange-rates.htm
    Trade and the Greenhouse Gas Emissions data
    Name
    Trade and the Greenhouse Gas Emissions data
    Note
    Located at: data/raw/christea_et_al The authors use data from a replication package, which can be downloaded from David Hummel’s website in the link below. The name of the files remain unchanged and save them in the folder “data/raw/christea_et_al/”. Source: Cristea, A., Hummels, D., Puzzello, L., & Avetisyan, M. (2013). Trade and the greenhouse gas emissions from international freight transport. Journal of environmental economics and management, 65(1), 153-173.
    Access policy
    The data is public but restricted from republishing, hence it is not included in the package.
    Data URL
    https://business.purdue.edu/faculty/hummelsd/research/datasets.php
    Trade Barriers and CO2 data
    Name
    Trade Barriers and CO2 data
    Note
    Located at: data/raw/trade_boundaries_rep The authors used data from a replication package, which can be downloaded from the link below. The files should be saved under “data/raw/trade_boundaries_rep” and do not change the file names. Source: lotz, R., & Sharma, R. R. (2023). Trade barriers and CO2. Journal of International Economics, 141, 103726.
    Access policy
    The data is public but the authors preferred not to share data from another reproducibility package, hence it is not included in the package.
    Data URL
    https://data.mendeley.com/datasets/m2tz6xvtzg/1
    OECD Environmental Tax Revenues data
    Name
    OECD Environmental Tax Revenues data
    Note
    Located at: data/raw/OECD/eurostat/env_ac_taxind2_linear.csv The data can be downloaded from: the link below. One should rename the file to: “env_ac_taxind2_linear.csv” and placed under “data/raw/OECD/eurostat/”. Source: Eurostat.
    Access policy
    The data is public but restricted from republishing, hence it is not included in the package.
    Data URL
    https://ec.europa.eu/eurostat/databrowser/view/env_ac_tax/default/table?lang=en
    FRED Consumer Price Index data
    Name
    FRED Consumer Price Index data
    Note
    Located at: data/raw/FED/CPIAUCSL.csv The authors used the Consumer Price Index for All Urban Consumers: All Items in U.S. City Average It can be downloaded from the link below. Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average [CPIAUCSL], retrieved from FRED.
    Access policy
    Published with package.
    Data URL
    https://fred.stlouisfed.org/series/CPIAUCSL
    CEPII Gravity data
    Name
    CEPII Gravity data
    Note
    Located at: data/raw/country_mapping.csv, country_mapping.txt For the welfare analysis, the authors split the estimates of: “Nordhaus, W. D., & Boyer, J. (2003). Warming the world: economic models of global warming. MIT press.”, into the countries that we study in our paper. This was done manually and relied on Table 3.1 in their paper. The authors provide the mapping in a CSV and a text file, which combines the 3-digit ISO code and the respective country grouping. The country codes from the gravity data from CEPII are available at the link below.
    Access policy
    Published with package.
    Data URL
    http://www.cepii.fr/CEPII/en/bdd_modele/bdd_modele_item.asp?id=8
    World Bank Official Administrative Boundaries
    Name
    World Bank Official Administrative Boundaries
    Note
    Located at: data/raw/world.dta, world_shp_merc.dta To create the maps used in the replication package (which are unequal to the ones in the paper), one can download the shape files in the link below. The authors provide the Mercator projection shape files in the raw data folder.
    Access policy
    Published with package.
    Data URL
    https://datacatalog.worldbank.org/search/dataset/0038272
    World Development Indicators - GDP data
    Name
    World Development Indicators - GDP data
    Note
    Located at: data/raw/WB_GDP_pc The authors use GDP data from the World Development Indicators from the World Bank. Available on the link below. The file is called “API_NY.GDP.PCAP.CD_DS2_en_csv_v2_4888903”.The files are under “data/raw/WB_GDP_pc”. Source: World Bank
    Access policy
    Published with package.
    Data URL
    https://databank.worldbank.org/reports.aspx?source=2&series=NY.GDP.MKTP.CD&country
    Data statement

    This research utilizes data from public sources. While all data used in this paper is publicly available, some of it is not republishable due to licensing restrictions. The data entries in this package outline all sources, including how to access the public but non-resharable data, along with instructions for their download and placement in the specified directories for full replication.

    Description

    Output
    Trade, Outsourcing, and the Environment
    Type
    Working Paper
    Title
    Trade, Outsourcing, and the Environment
    Authors
    Erhan Artuc and Konstantin Sommer
    Description
    Policy Research Working Paper (PRWP) 10665
    URL
    http://documents.worldbank.org/curated/en/099321301112414585/IDU1e2f5c11c11f0614c5c19f511696a41248dec
    DOI
    https://doi.org/10.1596/1813-9450-10665
    Authors
    Author Affiliation Email
    Erhan Artuc World Bank eartuc@worldbank.org
    Konstantin Sommer University of Amsterdam, Vrije Universiteit Amsterdam and World Bank k.h.l.sommer2@uva.nl
    Date of production

    2024-01

    Scope and coverage

    Geographic locations
    Location Code
    World WLD
    Keywords
    Trade Environment Carbon tax Carbon tariffs Leakage
    Topics
    ID Topic Parent topic ID Vocabulary Vocabulary URI
    F13 Trade Policy • International Trade Organizations F1 Journal of Economic Literature (JEL)
    F18 Trade and Environment F1 Journal of Economic Literature (JEL)
    Q56 Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth Q56 Journal of Economic Literature (JEL)

    Disclaimer

    Disclaimer

    The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.

    Access and rights

    License
    Name URI
    Creative Commons Attribution 4.0 International (CC BY 4.0) https://creativecommons.org/licenses/by/4.0/

    Contacts

    Contacts
    Name Affiliation Email
    Erhan Artuc World Bank eartuc@worldbank.org
    Reproducibility WBG World Bank reproducibility@worldbank.org

    Information on metadata

    Producers
    Name Abbreviation Affiliation Role
    Reyes Retana MRR World Bank Junior Data Scientist
    Date of Production

    2024-01-03

    Document version

    1

    Citation

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