Coordinating Climate and Trade Policies: Pareto Efficiency and the Role of Border Tax Adjustments
This paper explores the role of trade instruments in globally efficient climate policies, focusing on the central issue of whether border tax adjustment (BTA) is warranted when carbon prices differ internationally. It shows that tariff policy has a role in easing cross-country distributional concerns that can make non-uniform carbon pricing efficient, and that Pareto-efficiency requires a form of BTA when carbon taxes in some countries are constrained, a special case being identified in which this has the simple structure envisaged in practical policy discussion. It also stresses - a point that has been overlooked in the policy debate - that the case for BTA depends critically on whether climate policies are pursued by carbon taxation or by cap-and-trade
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jota Ishikawa & Kazuharu Kiyono, 2006. "Greenhouse-Gas Emission Controls In An Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 431-450, 05.
- Hoel, M., 1993.
"Should a Carbon Tax Be Differentiated Across Sectors?,"
09/1993, Oslo University, Department of Economics.
- Hoel, Michael, 1996. "Should a carbon tax be differentiated across sectors?," Journal of Public Economics, Elsevier, vol. 59(1), pages 17-32, January.
- Hoel, Michael, 1994. "Should a Carbon Tax be Differentiated Across Sectors?," CEPR Discussion Papers 1066, C.E.P.R. Discussion Papers.
- Graciela Chichilnisky & Geoffrey Heal, 1993.
"Who Should Abate Carbon Emissions? An International Viewpoint,"
NBER Working Papers
4425, National Bureau of Economic Research, Inc.
- Chichilnisky, Graciela & Heal, Geoffrey, 1994. "Who should abate carbon emissions? : An international viewpoint," Economics Letters, Elsevier, vol. 44(4), pages 443-449, April.
- Osberghaus, Daniel & Reif, Christiane, 2010.
"Total costs and budgetary effects of adaptation to climate change: An assessment for the European Union,"
ZEW Discussion Papers
10-046, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Daniel Osberghaus & Christiane Reif, 2010. "Total Costs and Budgetary Effects of Adaptation to Climate Change: An Assessment for the European Union," CESifo Working Paper Series 3143, CESifo Group Munich.
- Copeland,B.R. & Scott Taylor,M., 2003.
"Trade, growth and the environment,"
10, Wisconsin Madison - Social Systems.
- Michael Keen & David Wildasin, 2004. "Pareto-Efficient International Taxation," American Economic Review, American Economic Association, vol. 94(1), pages 259-275, March.
- Baumol,William J. & Oates,Wallace E., 1988.
"The Theory of Environmental Policy,"
Cambridge University Press, number 9780521311120, June.
- Moore, Michael O., 2010.
"Implementing carbon tariffs : a fool's errand ?,"
Policy Research Working Paper Series
5359, The World Bank.
- repec:clg:wpaper:2008-02 is not listed on IDEAS
- Stiglitz Joseph, 2006. "A New Agenda for Global Warming," The Economists' Voice, De Gruyter, vol. 3(7), pages 1-4, July.
- Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September.
- Arik Levinson & M. Scott Taylor, 2004.
"Unmasking the Pollution Haven Effect,"
NBER Working Papers
10629, National Bureau of Economic Research, Inc.
- Kotsogiannis, Christos & Woodland, Alan, 2013. "Climate and international trade policies when emissions affect production possibilities," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 166-184.
- Ben Lockwood & John Whalley, 2008.
"Carbon Motivated Border Tax Adjustments: Old Wine in Green Bottles?,"
NBER Working Papers
14025, National Bureau of Economic Research, Inc.
- Ben Lockwood & John Whalley, 2010. "Carbon-motivated Border Tax Adjustments: Old Wine in Green Bottles?," The World Economy, Wiley Blackwell, vol. 33(6), pages 810-819, 06.
- Markusen, James R., 1975. "International externalities and optimal tax structures," Journal of International Economics, Elsevier, vol. 5(1), pages 15-29, February.
- Arja H. Turunen-Red & Alan D. Woodland, 2004. "Multilateral Reforms of Trade and Environmental Policy," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 321-336, 08.
- Ian Sheldon, 2006. "Trade and Environmental Policy: A Race to the Bottom?," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(3), pages 365-392.
- Falvey, Rodney E., 1988. "Tariffs, quotas and piecemeal policy reform," Journal of International Economics, Elsevier, vol. 25(1-2), pages 177-183, August.
- J. Neary, 2006.
"International Trade and the Environment: Theoretical and Policy Linkages,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 33(1), pages 95-118, 01.
- J. Peter Neary, 2005. "International trade and the environment : theoretical and policy linkages," Working Papers 200018, School of Economics, University College Dublin.
- Turunen-Red, Arja H. & Woodland, Alan D., 1988. "On the multilateral transfer problem : Existence of Pareto improving international transfers," Journal of International Economics, Elsevier, vol. 25(3-4), pages 249-269, November.
- Trevor Houser & Rob Bradley & Britt Childs, 2008. "Leveling the Carbon Playing Field: International Competition and US Climate Policy Design," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4204.
- Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
- Daniel Gros, 2009. "Global Welfare Implications of Carbon Border Taxes," CESifo Working Paper Series 2790, CESifo Group Munich.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_3494. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.