This seminar features two presentations on environmental economics in the Asia-Pacific by Kade Denton and Thuy-Linh Bui as part of their PhD Confirmation of Candidature.
Presentation 1: Natural Capital Markets – A conceptual framework (Kade Denton)
Southeast Asia's natural environments are among the most extensive and biodiverse on earth, but their economic value remains largely uncaptured. Market mechanisms that price environmental protection could unlock new income streams for landholders while supporting the region's development goals. This paper examines the role of natural capital in the economy and how market mechanisms can help landholders capture value from privately produced public services — the ecosystem services that benefit society but generate no income for the individuals who provide them. It analyses how market design and economic frictions discourage participation in existing environmental markets. The paper then proposes a new Natural Capital Market Framework that introduces a dual credit structure of conservation and improvement credits alongside flexible contracting options to reduce these barriers. The framework is developed as a conceptual foundation for analysis of natural capital markets in ASEAN.
Presentation 2: Presentation title: Trade Liberalisation and Embodied Emissions: An Ex-Post Analysis of ChAFTA's Effects (Thuy-Linh Bui)
This paper examines the emissions effects of trade liberalisation by quantifying the greenhouse gas (GHG) emissions embodied in trade associated with the China–Australia Free Trade Agreement (ChAFTA), a setting that links resource-intensive extraction in a high-income economy to manufacturing in a major emerging economy. Utilising OECD Inter-Country Input-Output data (1995–2020), I first provide a descriptive decomposition of emissions into scale, technique, and composition effects to characterise long-term trends in bilateral embodied emissions. I then develop a dual gravity framework to disentangle ChAFTA's specific contributions through scale and composition channels. The findings reveal large and asymmetric effects: emissions embodied in Australia's exports to China rose by 65%, while those in China's exports to Australia rose by 35%. In direct (production-based) emissions, this expansion is driven by scale effects along existing lines of comparative advantage, with no significant shift toward pollution-intensive industries — inconsistent with a pollution haven mechanism in either direction. Once supply-chain linkages are accounted for, however, ChAFTA significantly raises emissions embodied in pollution-intensive industries on both sides, suggesting that the agreement's pollution effects operate through indirect input sourcing rather than direct relocation of dirty production.
Zoom link: https://anu.zoom.us/j/81709082090?pwd=ZHzhlsILKw6btdkks2azUzO003ljGh.1
Password: EABER
Event Speakers
Kade Denton
Kade Denton is a PhD Scholar in the Arndt-Corden Department of Economics at the Crawford School of Public Policy, Australian National University. His research examines the design of natural capital markets in ASEAN, with a focus on markets for environmental protection and their implications for trade and investment.
Thuy-Linh Bui
Thuy-Linh Bui is a PhD Candidate in Economics at the Crawford School of Public Policy, Australian National University. Her research focuses on the intersection of international trade, environmental economics, and applied econometrics.