Working papers

Trade, Outsourcing & the Environment
  (With Erhan Artuc)

This paper analyzes the effects of carbon taxation and carbon border adjustments in a setting where firms can choose to respond to taxation by abating, or by outsourcing part of their production. For this, we set 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 only target scope 1 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.
Most recent draft

Economic performance and investments under
  emissions trading: untangling the effects of a staggered regulation
  (With Leon Bremer)

We study the effects of the EU Emissions Trading System (ETS) on economic performance and investments of Dutch manufacturing firms. Motivated both by sizable differences between firms that are regulated in different phases and by a gradual increase in regulatory stringency, we pay close attention to treatment effect heterogeneity between firms and over time. We use microdata from Statistics Netherlands to show how using a two way fixed effect estimator in such a staggered difference-in-differences setting could lead biased results and then use more recent econometric techniques to capture the ETS's treatment effect. We find no effects of the ETS on investment behavior and profitability, but sizable negative effects on the turnover of firms that were regulated the earliest and were the most energy-intense.
Most recent draft

The effects of market integration on pollution:
  an analysis of EU enlargements (With Franc Klaassen and Henri de Groot)

We study the effects of market integration on manufacturing emission intensities of CO2, SOx, and NOx. For this, we analyse the 2004 and 2007 EU enlargements in a sectoral panel with data on almost all EU member states from 1995 to 2015. We pay close attention to relevant channels of trade, regulation, and efficiency. Overall, the enlargements have resulted in a reduction of emission intensities in new member states: new regulations, which accession countries needed to adopt, have lowered pollution intensities strongly; induced improvements in productivity have further reduced them; and trade integration into the EU has had insignificant effects on emission intensities. We also do not find evidence of within-EU pollution haven effects and thus of leakage from old to new member states. For old members, trade integration, if anything, increased emission intensities, but efficiency improvements have also contributed to cleaner manufacturing sectors here.
Working paper

Leakage in material-intense production -
  and CO2 emissions (With Daria Taglioni)

Free trade can drive efficiency increases in the utilization of natural resources, but it can also leave countries overly exposed to foreign sources of raw materials. Furthermore it can induce material intensive production to relocate abroad if more stringent rules are adopted at home, a phenomenon known as "leakage" in the trade and environment literature. Applying well-established concepts and analyses from the trade and pollution literature to the effects of free trade on natural resources and materials, we find statistically significant, but economically small evidence, for higher income countries decreasing their material usage when opening up for trade, while lower income countries increase theirs. This indicates some for of outsourcing. We also find that the famous environmental Kuznets curve behavior seems to be present for materials as well, but the evidence on this is weaker than for CO2. Finally, the similarities between the results for raw materials and those for CO2 indicate that well-designed policy that addresses both domains and takes trade channels into consideration could increase the desired outcomes.
Draft available upon request

Work in progress

The other China shock:
  evidence from the Chinese waste ban on the reasons for waste trade.

This paper studies the effects of a 2017 ban on waste imports, imposed by China, on the reallocation of waste trade. Until then, China imported between 30 and 50\% of all global waste, hence implying large diversion effects after the ban was implemented. I plan to derive a theoretical model, showing that waste trade in essence occurs for two reasons: disposal and recycling. This implies that there is both an incentive for countries with higher environmental preferences to send waste intended for disposal abroad (a so-called "waste haven effect"), and for industry-intense economies to purchase waste, recycle it, and use it as an input in production. I then estimate the effect of the ban on the imports of all countries except China and plan to show how countries with different characteristics - regarding the two motives for waste trade - have responded differently to the shock. A very early analysis suggests that middle income countries and countries with low recycling costs have increased waste imports as a response.
Non-technical summary

Policy-focused work

World Bank report: Squaring the Circle:
  Policies from Europe’s Circular Economy Transition
 Trade and circular economy chapter (With Daria Taglioni)

We asses the dynamics of the relationship between trade and circular economy outcomes; both in the EU and globally. We focus specifically on developing countries and highlight the dependence of the EU on marterial-intense imports from countries outside the block.
Acces report

CPB report: Geopolitical decoupling
  and integration scenarios of global trade (With Benjamin Wache,
  Stefan Boeters, Merve Matus Kücük, Gerdien Meijerink,
  and Maarten van't Riet)

The introduction of widespread trade restrictions between the West and both Russia and China (referred to as decoupling) precipitates significant short-term shifts in trade flows. The impact on various Dutch industries differs notably. Over the long term, decoupling adversely impacts the Dutch economy, albeit in a manner consistent with other Western nations. Notably, China and Russia face more severe repercussions than the West when trade relations are halted.
Acces report

CPB report: The importance
  of Dutch service activities in global value chains (With Benjamin Wache,
  Stefan Boeters, Daan Freeman, Gerdien Meijerink,
  and Maarten van't Riet)

The Dutch manufacturing industry is undergoing significant changes, with a growing emphasis on income derived from services. We are witnessing a gradual shift in the types of activities that contribute to the Netherlands' earnings from global production chains. Workers in the Netherlands earn from goods made both domestically and abroad, but there is an increase in earnings from services such as consultancy, alongside a decline in earnings from production activities like assembly.
Acces report