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Effects of carbon-based border tax adjustments on carbon leakage and competitiveness in livestock sectors

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  • Irfanoglu, Zeynep Burcu
  • Golub, Alla A.
  • Hertel, Thomas W.
  • Henderson, Benjamin B.

Abstract

Given the likely absence of a “top-down” global agreement after the 2012 expiry of the Kyoto Protocol, many countries (or groups of countries) may only be prepared to introduce a price on GHG emissions if they can maintain the competitiveness of their domestic sectors and prevent leakage effects associated with the expansion of unregulated sectors in other countries. One means of achieving this is through border tax adjustments (BTAs). Most of the studies to date have focused on BTAs in the context of CO2 combustion emissions from manufacturing sectors. Agricultural sectors, on the other hand, account for a large share of the hitherto underemphasized non-CO2 emissions. By drawing on recent research into non- CO2 emissions and abatement possibilities in the global agriculture and livestock sectors, this paper seeks to complement and extend the existing literature on BTAs. To do this, the paper uses the global computable general equilibrium model GTAP-AEZ-GHG. The analysis shows that BTAs are helpful in controlling loss of competitiveness and emissions leakage in livestock sectors. The study also assesses effect of BTAs on emissions leakage in other sectors and relationship between effectiveness of BTAs and coalition size.

Suggested Citation

  • Irfanoglu, Zeynep Burcu & Golub, Alla A. & Hertel, Thomas W. & Henderson, Benjamin B., 2012. "Effects of carbon-based border tax adjustments on carbon leakage and competitiveness in livestock sectors," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125006, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea12:125006
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    References listed on IDEAS

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    1. repec:dau:papers:123456789/7346 is not listed on IDEAS
    2. Bao, Qin & Tang, Ling & Zhang, ZhongXiang & Wang, Shouyang, 2013. "Impacts of border carbon adjustments on China's sectoral emissions: Simulations with a dynamic computable general equilibrium model," China Economic Review, Elsevier, vol. 24(C), pages 77-94.
    3. Monjon, Stéphanie & Quirion, Philippe, 2011. "Addressing leakage in the EU ETS: Border adjustment or output-based allocation?," Ecological Economics, Elsevier, vol. 70(11), pages 1957-1971, September.
    4. Stéphanie Monjon & Philippe Quirion, 2010. "Addressing leakage in the EU ETS : Border adjustment or output-based allocation ?," Working Papers hal-00866444, HAL.
    5. Golub, Alla & Hertel, Thomas & Lee, Huey-Lin & Rose, Steven & Sohngen, Brent, 2009. "The opportunity cost of land use and the global potential for greenhouse gas mitigation in agriculture and forestry," Resource and Energy Economics, Elsevier, vol. 31(4), pages 299-319, November.
    6. Niven Winchester, 2012. "The Impact of Border Carbon Adjustments Under Alternative Producer Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 354-359.
    7. Reyer Gerlagh & Onno Kuik, 2007. "Carbon Leakage with International Technology Spillovers," Working Papers 2007.33, Fondazione Eni Enrico Mattei.
    8. Jean-Marc Burniaux & Jean Chateau & Romain Duval, 2013. "Is there a case for carbon-based border tax adjustment? An applied general equilibrium analysis," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2231-2240, June.
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    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

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