Energy and CO 2 emission relationships in the NAFTA trading bloc: a multi-regional multi-factor energy input¿output approach
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© 2018, © 2018 The International Input--Output Association. The North-America Free Trade Agreement (NAFTA) has brought together the economies of Canada, Mexico, and the US into forming one of the largest trading blocs worldwide (within the top CO 2 emitters). However, the current global protectionist discourse threatens the agreement. This paper analyzes the energy and energy-related CO 2 emission relationships between NAFTA countries in 2014 to gain insights into the climate change implications of current integration and the possible cancelation of the agreement. The analysis is performed with a multi-regional version of the multi-factor energy input¿output model. The results show that NAFTA has not built a single integrated energy system, though it has helped reduce energy-related CO 2 emissions. Moreover, if NAFTA is not revoked, further integration would depend on the capacity of the Mexican energy sector to converge to the performance of its trade partners¿ energy sectors. Conversely, a broken deal would induce negative environmental externalities.