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This paper uses matched employer-employee data covering the universe of Swedish private sector firms 1998-2014 to examine the links between exchange rate risk and the skill composition of labor in firms. We use firm x export destination and firm x import origin data to calculate firm-level measures of real exchange rate risk and real effective exchange rates. Our main result is that firms facing higher exchange rate risk employ a higher share of skilled labor and that the effect is especially marked among trade intensive firms in manufacturing and in firms with fewer than 50 employees. This finding is consistent with theoretical models of flexible work systems that require higher skill levels as a way of responding to higher risk.

This paper uses a monopolistic competitive framework to study the impact of trade liberalization on local and global emissions. We focus on the interplay of asymmetric emission taxes and the home market effect and show how a large-market advantage can counterbalance a high emission tax, so that trade liberalization leads firms to move to the large high-tax economy. Global emissions decrease when trade is liberalized in this case. We then simulate the model with endogenous taxes. The larger country, which has the advantage of the home market effect, will be able to set a higher Nash emission tax than its smaller trade partner yet still maintain its manufacturing base. As a result, a pollution haven will typically not arise in this case as trade is liberalized. However, global emissions increase as a result of international tax competition, which underscores the importance of international cooperation as trade becomes freer.

The thesis comprises four essays examining aspects of international trade and environment. "Border carbon adjustments (BCAs) and Strategic Climate Policy" examines how BCA affects government incentives to regulate emissions and trade in a strategic setting and contrasts the impact of a BCA and a tariff: the distinction being that the level of the BCA is a function of the difference in the trade partner's emission taxes whereas the tariff is not. I show that a BCA leverages the exporter's climate policy provided the exporter has little influence over world prices (i.e. export supply elasticity is large) and has a weak climate policy. "How does the price of electricity affect imports? A study of Swedish manufacturing firms" examines the heterogeneous effects of a domestic electricity price increase on the structure of imports. We identify the magnitude of the impact of the electricity price increase on the structure of firm imports. Our findings agree with the predictions of our theoretical model. "Trade, Transboundary Pollution and Market Size" suggests a new set of theoretical reasons that may help reconcile the contradictory empirical evidence of the impact of trade liberalization on the location of production to countries with weaker pollution policy. Our results suggest that relative market size, the level of trade costs, the ease of abatement, and the degree of product differentiation at the sector level are relevant variables for empirical studies on trade and pollution. Market shares for organic products are typically modest. Yet several consumer surveys find that a majority of respondents would buy substantially more of these products even if they cost more. "What’s holding it back? A study in organic retail coffee purchases" explores reasons for this apparent divergence. The results suggest that the limited overlap between organic and other highly-valued characteristics is one of the most important constraints.