Does the U.S. Export Global Warming? Coal Trade and the Shale Gas Boom

Christopher R. Knittel, Konstantinos Metaxoglou, Anson Soderbery, and André Trindade

September 2018

We examine the effect of the U.S. Shale Gas Boom on global trade and consumption of coal and CO2 emissions. We estimate a structural model that links the domestic to the international coal market and use it to simulate counterfactual scenarios. Our results show that the total quantity of coal traded around the world in the absence of the Boom is essentially the same as the actual. A compositional change towards dirtier coal could still have significant environmental effects; we show that this is not the case either. Hence, U.S. coal exports simply displaced other coal without affecting global emissions.

Keywords: Coal, Emissions, International Trade, Shale Gas Boom.
JEL codes: F18, L13, Q53.