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Emission Taxes and Border Tax Adjustments for Oligopolistic Industries

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  • Morihiro Yomogida
  • Nori Tarui

Abstract

We examine the welfare consequence of emissions tax with and without a Border Tax Adjustment for an imperfectly competitive industry, where intra-industry trade arises between countries. BTA allows a government to impose a pollution-content tariff on imports and refund an emission tax for export sales. We analyze the structure of an optimal emission tax with BTA when a government chooses its emission tax rate to maximize its national welfare. We show that the optimal emission tax policy with BTA achieves greater national welfare and higher environmental quality than the optimal policy without BTA.
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Suggested Citation

  • Morihiro Yomogida & Nori Tarui, 2013. "Emission Taxes and Border Tax Adjustments for Oligopolistic Industries," Pacific Economic Review, Wiley Blackwell, vol. 18(5), pages 644-673, December.
  • Handle: RePEc:bla:pacecr:v:18:y:2013:i:5:p:644-673
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    File URL: http://hdl.handle.net/10.1111/1468-0106.12045
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    References listed on IDEAS

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    Cited by:

    1. Alain-Désiré Nimubona & Horatiu Rus, 2015. "Green Technology Transfers and Border Tax Adjustments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 189-206.

    More about this item

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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