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Implementing Carbon Tariffs: A Fool’s Errand?

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  • Michael O. Moore

Abstract

Some governments are considering taxes on imports based on carbon content from countries that have not introduced climate change policies. Such carbon border taxes appeal to domestic industries facing higher charges for their own carbon emissions. This research demonstrates that there are enormous practical difficulties surrounding such plans. Various policies are evaluated according to World Trade Organization compliance, administrative plausibility, help in meeting environmental goals, and ability to deal with domestic pressures. The steel industry is used as a case study in this analysis. All considered policies arguably fail to meet at least one of these constraints, bringing into question the plausibility that a carbon border tax can be practical policy.
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  • Michael O. Moore, 2011. "Implementing Carbon Tariffs: A Fool’s Errand?," The World Economy, Wiley Blackwell, vol. 34(10), pages 1679-1702, October.
    • Handle: RePEc:bla:worlde:v:34:y:2011:i:10:p:1679-1702
    DOI: j.1467-9701.2011.01406.x
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    Cited by:

    1. Nicole A. MATHYS & Jaime DE MELO, 2011. "The Political Economy of Climate Change Policies: Political Economy Aspects of Climate Change Mitigation Efforts," Working Papers P24, FERDI.
    2. repec:hal:wpspec:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    3. Nicole A. MATHYS & Jaime DE MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    4. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    5. Messerlin, Patrick A., 2010. "Climate change and trade policy : from mutual destruction to mutual support," Policy Research Working Paper Series 5378, The World Bank.
    6. Springmann, Marco, 2012. "A look inwards: Carbon tariffs versus internal improvements in emissions-trading systems," Energy Economics, Elsevier, vol. 34(S2), pages 228-239.
    7. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    8. Jaime de Melo, 2012. "Trade in a 'Green Growth' Development Strategy Global Scale Issues and Challenges," Working Papers 2012.47, Fondazione Eni Enrico Mattei.
    9. Patrick MESSERLIN, 2011. "Climate, trade and water: A “grand coalition”?," Working Papers P23, FERDI.
    10. Ian Parry, 2013. "Fiscal instruments for climate finance," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 16, pages 377-402, Edward Elgar Publishing.
    11. Antimiani, Alessandro & Costantini, Valeria & Martini, Chiara & Salvatici, Luca & Tommasino, Maria Cristina, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Conference papers 332096, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Keen, Michael & Kotsogiannis, Christos, 2014. "Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments," Journal of International Economics, Elsevier, vol. 94(1), pages 119-128.
    13. Hübler, Michael, 2012. "Carbon tariffs on Chinese exports: Emissions reduction, threat, or farce?," Energy Policy, Elsevier, vol. 50(C), pages 315-327.
    14. Antimiani, Alessandro & Costantini, Valeria & Martini, Chiara & Salvatici, Luca & Tommasino, Maria Cristina, 2013. "Assessing alternative solutions to carbon leakage," Energy Economics, Elsevier, vol. 36(C), pages 299-311.
    15. repec:spo:wpecon:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    16. repec:hal:spmain:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    17. Patrick MESSERLIN, 2011. "Climate, trade and water: A “grand coalition”?," Working Papers P23, FERDI.
    18. Steffen, Nico, 2016. "Optimal Tariffs and Firm Technology Choice: An Environmental Approach," VfS Annual Conference 2016 (Augsburg): Demographic Change 145861, Verein für Socialpolitik / German Economic Association.
    19. Patrick Messerlin, 2012. "Climate and trade policies: from mutual destruction to mutual support," Post-Print hal-01024537, HAL.
    20. Patrick Messerlin, 2010. "Climate change and trade policy: From mutual destruction to mutual support," Working Papers hal-00972994, HAL.
    21. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    22. Patrick Messerlin, 2012. "Climate and trade policies: from mutual destruction to mutual support," Sciences Po publications info:hdl:2441/faqom67ai2q, Sciences Po.
    23. Patrick Messerlin, 2010. "Climate change and trade policy: From mutual destruction to mutual support," Sciences Po publications info:hdl:2441/5l6uh8ogmqi, Sciences Po.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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