Transboundary environmental policy effects: Markets and emission leakages
AbstractAccording to the Environmental Kuznets Curve (EKC) literature, several mechanisms within rich economies, including increased willingness to conduct abatement policies, contribute to reduce environmental problems. Unilateral environmental policies in open economies may affect other countries negatively through trade inter-linkages. A relocation of dirty production and environmental pressure to economies with laxer abatement regimes can be one of many explanations to the apparent EKCs for rich countries. Further, the economic costs of national abatement policies may to some extent be shared with foreigners, both through lower demand for imports and through market share losses for foreign competitors producing cleaner products. In this paper, we quantify the effects of endogenous carbon tax policy in a rich and open economy, Norway, by means of a CGE model. We find that the environmental benefits fall and the economic costs rise when a global rather than a national perspective is employed.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 384.
Date of creation: Aug 2004
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Climate policy; Dynamic CGE Model; Endogenous Policy; Environmental Kuznets Curve; Pollution leakage;
Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-22 (All new papers)
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