Intra-BRICS Trade Opening and Its Implications for Carbon Emissions: A General Equilibrium Approach
Levent Aydın

The BRICS countries of Brazil, Russia, India, China and South Africa came together to call for an Action Plan for proceeding with their plans on trade and investment. This article analyzes the impact of a possible trade and investment agreement among BRICS countries on carbon emissions by using the general equilibrium approach. Based on two-policy scenarios, the analysis is done in short and long runtime path concerning capital movement across BRICS countries. Using modified GTAP-E model, scale and composition effects of trade opening and capital movement among these countries on carbon emission are measured. When we compare the short run effects with the long run effects of intra-BRICS trade opening, we see that the BRICS countries experienced higher increases in real GDP due to increases in capital stocks in the long run. Unfortunately, a grater increase in real GDP results in increase in carbon emissions depending on the strength of scale effects.

Full Text: PDF     DOI: 10.15640/jeds.v4n2a16