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Global carbon pricing and international trade

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  • Takumi Haibara

Abstract

This paper provides policies other than trade restrictions to induce global carbon pricing. It shows that bilateral increases of domestic taxes between large open economies represent a useful first step toward global carbon pricing. Specifically, the paper recommends that the production tax of the importing country and the consumption tax of the exporting country be increased together. Unlike a tariff-induced carbon pricing, the proposed policy mix is robust to trade distortions and increases market access. What is more, it addresses world price volatility and emissions leakage.

Suggested Citation

  • Takumi Haibara, 2020. "Global carbon pricing and international trade," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 9(1), pages 111-124, January.
    • Handle: RePEc:taf:teepxx:v:9:y:2020:i:1:p:111-124
    DOI: 10.1080/21606544.2019.1612786
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