nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2022‒08‒08
eighteen papers chosen by



  1. The Russia-Ukraine War and Food Security in Morocco By Abdelaaziz Ait Ali; Uri Dadush; Fatima Ezzahra Mengoub; Isabelle Tsakok
  2. Optimal tariff versus optimal sanction: The case of European gas imports from Russia By Gros, Daniel
  3. Low-carbon technologies and Russian imports: How far can recycling reduce the EU's raw materials dependency? By Rizos, Vasileios; Righetti, Edoardo
  4. Challenges and opportunities to develop Kazakhstani logistics projects within the BRI By Brauweiler, Hans-Christian; Yerimpasheva, Aida
  5. Populist civil society, the Wagner Group, and post-coup politics in Mali By Sebastian Elischer
  6. Nord Stream 2 - Deutschlands Dilemma By Westphal, Kirsten
  7. The EU’s Strategic Compass: A guide to reverse strategic shrinkage? By Blockmans, Steven; Macchiarini Crosson, Dylan
  8. Implications of Food Systems for Food Security: The case of the Federal Republic of Nigeria By Isabelle Tsakok
  9. Gas demand in times of crisis. The response of German households and industry to the 2021/22 energy crisis By Ruhnau, Oliver; Stiewe, Clemens; Muessel, Jarusch; Hirth, Lion
  10. A pillar of stability in an unstable world: Strengthening EU-Japan security cooperation in the Indo-Pacific By Benaglia, Stefania; Macchiarini Crosson, Dylan
  11. Deep historical roots, culture choice and the New World Order By Miller, Marcus
  12. Where the (euro) buck stops: Facing the next big crisis with a better EU budget By Núñez Ferrer, Jorge
  13. L’agriculture ukrainienne sous tension By Sandrine Levasseur
  14. Minimum Wages in Developing Countries By Fang, Tony; Ha, Viet Hoang
  15. Economic drivers of volatility and correlation in precious metal markets By Theu Dinh; Stéphane Goutte; Khuong Nguyen; Thomas Walther
  16. Atlantis Rising A Blueprint for a Better World By Hanappi, Hardy
  17. Can the Pay Transparency Directive close the gender pay gap? By Alcidi, Cinzia; Ounnas, Alexandre
  18. CO2 Emission and Trade Policy in Agricultural and Food products By Raimondi, Valentina; Curzi, Daniele; Lucarno, Riccardo; Olper, Alessandro

  1. By: Abdelaaziz Ait Ali; Uri Dadush; Fatima Ezzahra Mengoub; Isabelle Tsakok
    Abstract: Following on the heels of the COVID-19 pandemic and severe drought in North Africa, the Russian invasion of Ukraine – large exporters of food and, in the case of Russia, energy— may inflict increased hunger on the food insecure in Morocco – despite mitigating measures by the government. Morocco is so far successfully shielding its large poor and vulnerable population by subsidizing essential commodities. With memories of the violent protests during the 2007/08 food and fuel crisis still fresh, government support is necessary to maintain social stability. Such support measures are costly even in a typical year. In 2022, the legacy of the pandemic, a combination of drought, soaring cereal and oil prices, global inflation, and economic slowdown will test the 'government's ability to keep fiscal deficits within sustainable bounds. Looking to the longer term, the high costs of government subsidies highlight the need for a sustainable strategy to deal with food security. Morocco's New Development Model (April 2021) promises to progress towards this goal by re-orienting public investment and creating incentives to improve efficiency and resilience in rain-fed agriculture and add value throughout the agri-food sector, not just in irrigated agriculture. The food and fuel crises triggered by the war raise the stakes for reforming the agri-food system throughout Africa, not only in Morocco. The African Continental Free Trade Agreement (AfCFTA) presents a unique opportunity to develop a vast and reliable regional market including food that is less exposed to the vagaries of the political, security, and economic environment outside the region.
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:ocp:ppaper:pb34-22&r=
  2. By: Gros, Daniel
    Abstract: Europe has set itself the aim of reducing its dependency on Russian gas imports. This paper provides an economic analysis of a tariff on imports of natural gas into the EU which would help achieve this goal. The starting point is Gazprom’s monopoly on exports of gas from Russia and pricing power on the European market. Standard trade theory implies that a tariff on Russian gas imports would be beneficial for Europe even on purely economic grounds because it would lower the demand curve Gazprom faces and induce it to lower prices. The standard linear model used here takes into account the availability of Liquified natural gas (LNG) supplies and confirms the general rule that it pays to levy a tariff on imports from a foreign monopoly. It yields the following numerical results: - Only one half of the tariff would result in higher prices for European consumers and the tariff revenue would be more than sufficient to compensate them for this loss. - The tariff, which maximises Europe’s welfare, would be close to one third of the price at which Europe would stop importing from Russia. This would cut Gazprom’s net revenues by approximately half. - If the tariff is used as a sanctions weapon to reduce revenues for Russia, the tariff should be higher (around 60 %) and would cut Gazprom’s revenues to one fourth of the free trade level. The overall conclusion is thus that an EU import tariff on Russian gas would have a major impact on Russia’s earning from gas exports and would certainly improve the European terms of trade.
    Date: 2022–05
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:36006&r=
  3. By: Rizos, Vasileios; Righetti, Edoardo
    Abstract: The term ‘strategic autonomy’ denotes the political goal of building a self-reliant EU economy with limited exposure to supply disruptions, like those stemming from the Covid-19 crisis. Securing access to the non-energy minerals required for building a new industrial ecosystem consistent with the EU’s decarbonisation objectives is important to achieving this goal. Rising demand for these materials has created an arena for geopolitical competition. Moreover, the war in Ukraine has brought forward the need to take a closer look at the external supply of minerals, including from Russia, and potential risks involved. This Policy Insight first provides a brief overview of EU import dependency on raw materials and Russia’s share among EU sources of key supplies for low-carbon technologies. It then looks at prospects for meeting future material demands though circularity for three technologies, namely lithium-ion batteries, wind turbines and fuel cell electric vehicles. The analysis is based on two scenarios with different levels of ambition. They aim to give an indication of the scale of potential benefits that can be achieved through circularity and recycling approaches for components and materials used in these technologies. The estimates suggest that establishing collection and recycling facilities in the EU, through the appropriate policy frameworks in place, can contribute to meeting future EU material demands for them and reduce import dependency. Still, recycling alone will not suffice to cover the increasing material requirements. Other options will therefore need to be considered, including developing strategic partnerships and joint projects with resource-rich countries (also in light of efforts to cut economic ties with Russia). The EU will further need to source from its own mining reserves, seek improvements in material efficiency and foster material substitution options where possible.
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:36180&r=
  4. By: Brauweiler, Hans-Christian; Yerimpasheva, Aida
    Abstract: The BRI initiative presents a colossal opportunity for landlocked Kazakhstan to become a central logistics hub. However, this prospect is overshadowed by geopolitical risks that have escalated since the beginning of 2022. The Ukrainian crisis increased geopolitical tensions on the Eurasian continent and worldwide. Furthermore, it disrupted respectively delayed logistics, as the borders both between Russian Federation and Belarussia on one side and many nations in Europe were practically closed, air traffic has to take huge diversions, increasing time and costs for the freight. A full-scale crisis has global consequences for states and people. Western companies have stopped their activities in Russia. Western countries have imposed unprecedentedly harsh sanctions on Russia. Supply chains can be broken. Chinese companies are concerned that their goods may be stopped at the border between Russia and the countries of Central and Eastern Europe. Because of close economic and political ties with the Russian Federation and membership in the Eurasian Economic Union (EAEU), Kazakhstan is concerned with secondary sanctions. Actually, there is already some impact, as Russian Banks in Kazakhstan have to cope with difficulties in international payments, which rebounds to their (innocent, kazakh and international expatriate) customers. Companies face a particular business risk that can be referred to as "geopolitical risk." Geopolitical risks are becoming the main problem for the further development of the Eurasian region.
    Keywords: logistics,hub,geopolitical risks,projects,EAEU,BRI,SREB,cooperation,transport logistics complex
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:opodis:20222&r=
  5. By: Sebastian Elischer
    Abstract: The military coup of August 2020 upended Mali’s fragile liberal democratic order. The junta-led transitionary government defies international pressure to fasten the return of democratically-elected rulers and constitutional rule. The ability of the junta to shape the course of Malian politics rests on two interconnected pillars. First, there is public resentment towards the post-1991 political class and France’s military involvement in the country. The forces representing that resentment view the junta as change makers and have formed influential political organisations that oppose there turn to the status quo ante. Second, there is the security co-operation with Russian mercenaries, which provides the transitionary government with an alternative security partner. The paper traces the origins, evolution, and the future strength of these pillars. It concludes by outlining future political scenarios and the future role of the military in Malian politics.
    Keywords: democracy, Mali, military coup, Russia, Wagner Group
    JEL: D74 F50 F55 P48
    Date: 2022–07–12
    URL: http://d.repec.org/n?u=RePEc:oec:swacaa:36-en&r=
  6. By: Westphal, Kirsten
    Abstract: Das Projekt Nord Stream 2 stellt die Bundesregierung vor das Dilemma, sich zwischen energie- und außenpolitischen Interessen entscheiden zu müssen. Eine Priorisierung sollte nicht ohne den Blick auf den energiepolitischen Kontext erfolgen. In der Frage der Güterabwägung gibt es keine einfachen und 'billigen' Antworten. Das gilt umso mehr, als die Energietransformation in Kooperation die größte Dividende für einen Interessenausgleich zu sein verspricht. Allerdings setzt sie einen Minimalkonsens innerhalb der Europäischen Union (EU), mit den USA, der Ukraine und auch Russland voraus.
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:swpakt:332021&r=
  7. By: Blockmans, Steven; Macchiarini Crosson, Dylan
    Abstract: Taking their fate into their own hands, EU heads of state and government endorsed the Strategic Compass on 24 March 2022, a roadmap for becoming a stronger security and defence actor. The shared threat assessment, a first in the history of the EU, is a positive development. Rewritten over the last month to emphasise the impact of Russia’s war of aggression against Ukraine, the Strategic Compass reveals a newfound consensus among EU Member States on the danger Russia poses, but also a lack of strategic foresight. This raises the question of whether the final document might contain shortcomings regarding the threat posed by China and the importance of the Indo-Pacific. As such, the document essentially characterises the EU’s security and defence actorness as that of a regional – not a global – power. Divided into four baskets, ‘Act’, ‘Secure’, ‘Invest’, and ‘Partner’, the Strategic Compass appears at times bogged down in policy details rather than answering the tough questions that might reveal an overarching vision for EU security and defence. However, if the measures outlined in the document are reinforced by more effective implementation and duly complemented by NATO’s forthcoming Strategic Concept, then the EU may yet appear more credible in the eyes of others and ultimately, the Strategic Compass will have been ink well spent.
    Date: 2022–03
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:36032&r=
  8. By: Isabelle Tsakok
    Abstract: Oil dominates Nigeria’s economy- “Africa’s Giant†. Oil revenues are both a blessing and a curse: a blessing because they are the single most important contributor to government revenues; a curse because, through the Dutch Disease, they undermine the productivity and competitiveness of other non-oil sectors, primarily agriculture and agri-processing; and manufacturing, two major sources of non-oil employment and incomes. Since Nigerian governments did not try to counter the Dutch Disease, Nigeria’s food systems have remained low productivity, a refuge for the majority of poor and vulnerable worsening overall poverty. The COVID-19 pandemic, closely followed by the widespread global supply chain dislocations and high inflation aggravated by the Russian invasion of Ukraine, has exacerbated an already difficult situation for Nigeria. To achieve its ambition of substantially reducing poverty by 2030, Nigeria must overcome daunting challenges on multiple fronts, e.g., governance, fiscal, socio-political and environmental. Whatever success is achieved along these fronts will have significant implications for its food systems and food security.
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:ocp:ppaper:pb41-22&r=
  9. By: Ruhnau, Oliver; Stiewe, Clemens; Muessel, Jarusch; Hirth, Lion
    Abstract: Europe is in the midst of the most severe energy crisis in a generation, at the core of which is the continuously plummeting supply of Russian natural gas. With alternative supply options being limited, natural gas prices have surged. This paper empirically estimates the response of natural gas demand to the price increase, using data from Germany—the so far largest consumer of Russian natural gas. We identify the crisis response of small and large consumers separately, controlling for temperature, gas-fired power generation, and economic activity. For small consumers, including mostly households, we find a substantial demand reduction of 6% from March onwards—most likely due to political and ethical considerations after the start of Russia’s invasion of Ukraine. For industrial consumers, demand reductions started much earlier in August 2021, when wholesale prices for natural gas started to surge, with an average reduction of 11%. We conclude that voluntary industrial demand response has played a significant role in coping with the energy crisis so far.
    Keywords: Energy demand,Demand response,European energy crisis,Natural gas
    JEL: Q41
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:261082&r=
  10. By: Benaglia, Stefania; Macchiarini Crosson, Dylan
    Abstract: The rising centrality of the Indo-Pacific is self-evident. What remains to be defined is the potential role the EU could play, notably as a security actor. Given capacity constraints, the EU’s objectives in the region should focus on credibility and on safeguarding shared interests – for example securing sea lines of communication, an objective also shared by Japan. Hard power remains the preferred language in the Indo-Pacific region. Australia unceremoniously dumping the French contract over US nuclear technology in the AUKUS affair, as well as India’s reluctance to take a position against Russia, a major provider of defence equipment, over its full-blown invasion of Ukraine demonstrate that being able to speak the language of power in a credible and reliable way takes precedence. While the EU will unlikely become a defence security provider à la the United States, it is now clear that it must evolve its global stance. The adoption of the EU Indo-Pacific Strategy and cross-references to it in the EU’s Strategic Compass represent an important milestone for bolstering its security and defence posture. The EU would do well to support its efforts to be a more credible security and defence actor in the Indo-Pacific by upgrading relations with its strategic partners, Japan in primis. Further operational, capabilities development, and industrial cooperation with Japan must be considered and reinforced by triangulation with other strategic partners in the region.
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:36074&r=
  11. By: Miller, Marcus (University of Warwick, CAGE and CEPR)
    Abstract: Gerard Roland examines data going back to 3,000 BC for historical roots that might explain the current division of nations as between cultures of collectivism and individualism. In response to the appeal for theories bearing on the empirical evidence presented - and of recent moves by Russia and China to create a New World Order based on similar cultural division - three contributions are discussed. First is the competing powers perspective of Acemoglu and Robinson, who propose that individualism flourishes where power is evenly balanced between the state and the people : otherwise, either Despotism or Disorder will ultimately prevail. Then there is Ken Binmores study of cooperative social contracts : this offers support for stable societies of each cultural type, based on the folk theorem of repeated games. Finally the notion that dictatorship may be sustained by deception rather than repression - by leaders whom Guriev and Treisman call spin dictators. In the light of these perspectives, what to make of the current drive for a new global order that recognizes different spheres of influence for each of Roland’s cultural types? We look specifically at the case of Russia.
    Keywords: Individualism ; Collectivism, Culture ; Social Contracts ; social preferences ; Neofeudalism ; Despotism ; New World Order JEL Classification: C70 ; C73 ; N00 ; P00 ; P50 ; Z10 ; Z13
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1414&r=
  12. By: Núñez Ferrer, Jorge
    Abstract: The EU budget’s current financial architecture is inappropriate to effectively address the various crises it has faced in recent years. This CEPS Policy Brief presents some immediate actions to raise overall funding and to address the impacts of the war in Ukraine with unspent EU funds. It also calls for longer term reforms to support the creation of a budget fit to respond to the next wave of future challenges that the EU will undoubtedly have to face.
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:36148&r=
  13. By: Sandrine Levasseur (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: L'Ukraine est devenue, ces dernières années, un acteur majeur sur les marchés internationaux de matières premières, produisant et exportant des quantités importantes de céréales et d'oléagineux. Dans ce document de travail, nous synthétisons les éléments saillants relatifs à l'agriculture ukrainienne: son importance en tant que « grenier à grains » pour reprendre l'expression consacrée sous la période soviétique; son organisation autour de 200 agro-holdings qui structurent la production et réalisent l'essentiel des exportations; la réforme foncière visant à pallier les problèmes dont souffrent l'agriculture ukrainienne. En filigrane, nous interrogeons un modèle agricole qui, certes, nourrit un nombre croissant d'individus – en Ukraine et dans le monde – mais sur une modalité de plus en plus productiviste. L'érosion des sols devrait davantage faire l'objet des préoccupations environnementales et ce, afin de préserver le capital naturel que constituent les terres noires (tchernozioms) ukrainiennes.
    Keywords: guerre,agriculture,Ukraine,biens agricoles,matières premières,dépendance
    Date: 2022–05–16
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03668911&r=
  14. By: Fang, Tony (Memorial University of Newfoundland); Ha, Viet Hoang (Memorial University of Newfoundland)
    Abstract: There is considerable debate on the level and effects of minimum wages for many decades. However, most of the studies are conducted in developed countries. This chapter first reviews the theoretical frameworks of anticipated effects of a minimum wage increase on wages and employment in developing countries. The empirical challenges are then discussed, including potential heterogeneity, simultaneity (or endogeneity) between employment and minimum wages, and possible omitted variable bias, taking into consideration of the different labour market structures and labour market institutions in developing countries, particularly the level of informal sector, extent of binding minimum wages, level of enforcement, and the vulnerability of the workers impacted. Evidence from BRICS members (Brazil, Russia, India, China, and South Africa) are reviewed and discussed. Surprisingly, there is substantial evidence of positive wage effects in both formal and informal sectors, although the adverse effects on employment are generally modest in the formal sector, and almost non-existent in the informal sector. However, when minimum wages are binding and enforced, studies focusing on vulnerable workers do find significant and positive wage effects and strong disemployment effects, implying that the classic trade-off of minimum wages between higher wages and lower employment does occur in developing countries.
    Keywords: minimum wages, labour market outcomes, developing countries
    JEL: J31 J33 J38
    Date: 2022–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp15340&r=
  15. By: Theu Dinh; Stéphane Goutte (SOURCE - SOUtenabilité et RésilenCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement, PSB - Paris School of Business); Khuong Nguyen (IPAG Business School); Thomas Walther
    Abstract: We investigate the time-varying dynamics of the precious metal markets. We employ a mixed data sampling technique to identify the impact of macroeconomic and financial drivers from G7 and BRICS countries on the daily volatility and pairwise correlation of Gold, Silver, Platinum, and Palladium. We find that the U.S. and Chinese economies in particular influence the precious metal markets, but in opposite directions. The stock markets and trade balance of both G7 and BRICS countries, as well as the consumer confidence of G7 countries, are the key drivers for the volatility of precious metals. The most influential drivers for correlation are stock markets, money supply, and the inflation rate. Surprisingly, the economic policy uncertainty does not affect the dynamics as much as expected. Lastly, the global financial crisis in 2008 affected the direction of most of the macroeconomic and financial drivers.
    Keywords: Precious metals,long-term volatility,long-term correlation,macroeconomic drivers,financial drivers,economic policy uncertainty,mixed data sampling
    Date: 2022–05–19
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03672469&r=
  16. By: Hanappi, Hardy
    Abstract: The current dynamics of the global political economy are depressing: A multidimensional climate crisis is taking on speed; new pandemic waves with unknown lethal consequences are building up; National capitalism – bent to become a new form of fascism – raises its head and the return to military conflict solution makes a 3rd World War possible. But despite these gloomy perspectives it remains true that mankind so far has mastered all difficulties as soon as it became aware of them. Our species in principle has all means – physically and intellectually – to let a new Atlantis rise. And the guidelines how to overcome the above mentioned three crises, are delivering the blueprint of the organizational design of such a new Atlantis. This paper explores this exciting hypothesis. The first goal to reach clearly is to avoid a 3rd World War, which means to defeat the fascist movements in the world. As the 20th century showed, fascism developed out of nationalism, which in turn was nourished by a nationwide controlled class rule, a form of military (and police) governed capitalist exploitation. This currently so successful form of capitalism (China, Russia, USA) is defined as ‘National Capitalism’. It corresponds to what I called disintegrating capitalism in (Hanappi, 2019a). Being victorious, to have overcome national capitalism, means to have been able to establish a global democratic government. To get there the progressive opposition to National Capitalism has to develop theory, strategy and practice. As described in (Hanappi, 2020) a certain degree of division of progressive labor activities – the emergence of a global class of organic intellectuals (1) – will be needed. Only with global governance the other two crises, the climate crisis and the future global health crises, can be overcome. Since they are already here and help to make the impasse of capitalism, of national capitalism, become very visible to every human individual, we already can find ways of global coordination to prevent them. In doing so, success is possible and can yield into the necessary optimism, an attitude which is necessary for the emotional basis of any progressive, humanistic movement. A man-made Atlantis can rise - not beyond an ocean but here on earth. We just have to unite our intellectual forces and to continue the century-old struggle for emancipatory social evolution (2). (1) In explaining Gramsci’s concept of the organic intellectual Perry Anderson writes: ‘Gramsci argued that intellectuals are absolutely necessary for the proletariat, both in historical periods when it is a class in-itself and in those when it is a class for-itself. Without intellectuals the proletariat could neither come to power, nor consolidate or develop its power after winning it.’ (Anderson, 2016, Kindle-Positions 1971-1982). (2) Thomas Morus wrote his ‘Utopia’ in 1516.
    Keywords: Global Political Economy, Crisis Management, Utopia
    JEL: B52 P00
    Date: 2022–06–27
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:113578&r=
  17. By: Alcidi, Cinzia; Ounnas, Alexandre
    Abstract: Today, our thoughts go out to all women who have had to flee Ukraine to escape horror and to save their children, and to all those women who have remained behind to help defend their homeland. To those men and women who have the chance to live in (still) peaceful EU countries, we want to recall that gender equality remains a top priority. In the EU, major progress has been made in advancing women’s rights over the past 25 years but challenges still remain, especially on the labour market. The gender pay gap is definitely not yet closed. Despite progress over the past few years, women in the EU are still paid less than men for equal work of equal value. In 2018, the gap was on average 14 %, and it is likely to have increased during the pandemic. In 2019, President von der Leyen put gender equality among the six priorities of her new Commission. In March 2021 the Commission published a proposal for a Directive to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms. Is pay transparency important to close the gender pay gap? The short answer is yes. Over time women have been closing gaps relative to men in education, labour market participation, and attitude; areas which typically (used to) explain the gap. Yet pay differences persist. New research points to within-company dynamics as one of the most significant contributors to the pay gap. The directive proposes to address it through transparency and information sharing. This is expected to reduce the gender pay gap, even though the implementation, and in particular the operationalisation of the concept of equal work, will pose challenges to companies, and eventually can negatively weigh on the overall benefits.
    Date: 2022–03
    URL: http://d.repec.org/n?u=RePEc:eps:cepswp:35738&r=
  18. By: Raimondi, Valentina; Curzi, Daniele; Lucarno, Riccardo; Olper, Alessandro
    Abstract: Agri-food system is one of the economic sectors most at risk from climate change, but it is also a significant contributor to it, with greenhouse gas emissions (GHG) from the food supply chain equal to one-third of the global anthropogenic total in 2018 (Tubiello et al. 2021). Specifically, crop and livestock production within the farm gate contributes more than 50% of the methane (CH4) and 75% of the nitrous oxide (N2O) emissions from human activity globally (FAO, 2020). This paper relies on the recent work of Shapiro (2021) that firstly analysed the nexus between pollution embodied in traded goods, against the actual structure of trade policy (tariffs or non-tariff measures-NTMs). In our contribution we focus on agricultural and food products, considering three main pollutants (CO2, CH4, N2O), with the aims of answering the following research question: are actual trade policies a tax or a subsidy to total CO2 (equivalent) emissions embedded in agri-food imported goods? Main findings suggest that for all the three pollutants investigated a negative implicit carbon tax is applied, i.e. on average countries applied an implicit subsidy on more pollutant imported goods. This estimated implicit subsidy to CO2 emissions imported in agri-food products tend to be higher when also the ad-valorem equivalent of non-tariff measures (NTMs) is accounted for. By investigating the country-group heterogeneity in the applied tax or subsidy to imported CO2, results show that the larger implicit subsidy is applied by the trade policy structure of European Union countries. Specifically, Western and Northern European countries have among the largest negative environmental biases in trade policy, while more polluting countries, like China, India, Russia, Brazil and Mexico, tend to apply smaller (implicit) subsidies.
    Keywords: International Relations/Trade, Environmental Economics and Policy, Agricultural and Food Policy
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:ags:aesc22:321217&r=

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