Trade and climate policies : the role of market structure strategic behaviour and the supply side of carbon Climate change is one of the greatest challenges of our time. It is a global problem that has to be understood in the context of a globalising world with an increasing amount of goods being traded. This dissertation focuses on the interrelation between international trade and climate policies. It contributes to the literature from two perspectives: a demand side view by means of theoretical modelling and a supply side view using numerical simulation. The first part of this dissertation uses general equilibrium trade models to analyse the effect of trade liberalisation on the environment. It shows that a trade induced reallocation of production factors towards the most productive firms can explain part of sector level changes in emission intensities. Moreover if environmental policy is used strategically to substitute for trade policy general equilibrium effects on firms’ markups need to be considered. The findings highlight that firm behaviour factor reallocation across firms and market structure all play a vital role for the impact of trade on the environment. The second part of this dissertation turns to the supply side of fossil fuels—the major source of greenhouse gas emissions. It shows that fossil fuels are globally abundant despite uncertainties in local supply for instance of unconventional natural gas. It is hence not a physical scarcity that solves the problem of climate change. Accordingly climate policy has to target the use of fossil fuels. While the use of natural gas may be consistent with the transformation towards a low carbon energy system the phase out of coal is integral for climate change mitigation. By means of numerical simulations the relation between climate policy and the international trade in natural gas and steam coal is investigated. Moreover this dissertation analyses to what extent major steam coal exporters have a self interest in restricting their supply.