Alternative designs for tariffs on embodied carbon: A global cost-effectiveness analysis
AbstractIn the absence of effective world-wide cooperation to curb global warming, import tariffs on embodied carbon have been proposed as a potential supplement to unilateral emissions pricing. We systematically consider alternative designs for such tariffs, and analyze their effects on global welfare within a multi-region, multi-sector computable general equilibrium (CGE) model of global trade and energy. Our analysis shows that systems more likely to comply with international law yield very little in terms of carbon leakage and efficiency. Generally, the effectiveness increases substantially with complexity. However, regionalising the tariffs seems not to be worthwhile. Also, the most effective system we identify is not based on fully input–output-corrected carbon contents, but on direct plus electricity emissions, only. This reflects the more general problem of finding systems that are both feasible and well-targeted in a real global economy.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 34 (2012)
Issue (Month): S2 ()
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Web page: http://www.elsevier.com/locate/eneco
Carbon leakage; Embodied carbon; Border tariffs;
Find related papers by JEL classification:
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
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- Christoph Böhringer & Knut Einar Rosendahl & Jan Schneider, 2013. "Unilateral Climate Policy: Can OPEC resolve the Leakage Probem?," Working Papers V-355-13, University of Oldenburg, Department of Economics, revised Mar 2013.
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