New Exploration of Comparative Advantage Theoretical Model for International Trade in the Context of Global Carbon Emissions Reduction

Resumen

With the increasing world's greenhouse gas (GHG) emissions and pressing global warming, the Earth's ecological environment for human beings survival is ever more threatened by the carbon dioxide (CO2), which is caused by the production and livelihood of the human beings themselves. Therefore, it is essential for the whole world to take strong measures for carbon emissions reduction. Under such circumstances, the traditional comparative advantage theory of international trade is bound to be challenged. Based on the classic comparative advantages of international trade and H-O theoretical model, this paper constructs a new Ricardian model and H-O theoretical model in combination of the carbon factor, using methodologies of theoretical deduction and comparative analyses. The results indicate: considering the carbon factor, the original comparative advantage of international trade will disappear, and the original direction of trade flow changes. What is more, the country that has a comparative advantage in the production of certain products turns into the country that has the disadvantage; in the case of remaining the same nature of factors, when taking the carbon factor into account, the original comparative advantage of international trade will be reversed. Based on the results of these analyses, this paper proposes relevant suggestions.