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Export Competition and the Remission of Domestic Environmental Taxes

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  • Steve Mccorriston

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  • Ian Sheldon

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Abstract

We consider the use of border adjustments to compensate exporters for domestic environmental taxes imposed on an intermediate good. A model of successive oligopoly is used to consider the appropriate border adjustments. In this set-up, the relative importance of the forward incidence of the environmental tax and the backward incidence of the remission play a key role. The results highlight that the simple rule employed by GATT/WTO to set the export remittance equal to the level of the environmental tax is likely to be inappropriate. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Steve Mccorriston & Ian Sheldon, 2005. "Export Competition and the Remission of Domestic Environmental Taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(5), pages 627-637, September.
  • Handle: RePEc:kap:itaxpf:v:12:y:2005:i:5:p:627-637
    DOI: 10.1007/s10797-005-0476-x
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    References listed on IDEAS

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    Cited by:

    1. Ian Sheldon & Steve McCorriston, 2012. "Climate policy and border tax adjustments: Might industrial organization matter?," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 9(2), pages 7-28, Julio-Dic.

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