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The Role of Border Carbon Adjustments in a US Carbon Tax

Author

Listed:
  • Warwick J. McKibbin
  • Adele C. Morris
  • Peter J. Wilcoxen
  • Weifeng Liu

Abstract

This paper examines carbon tax design options in the United States using an intertemporal computable general equilibrium model of the world economy called G-Cubed. Four policy scenarios explore two overarching issues: (1) the effects of a carbon tax under alternative assumptions about the use of the resulting revenue, and (2) the effects of a system of import charges on carbon-intensive goods (“border carbon adjustments”).

Suggested Citation

  • Warwick J. McKibbin & Adele C. Morris & Peter J. Wilcoxen & Weifeng Liu, 2017. "The Role of Border Carbon Adjustments in a US Carbon Tax," CAMA Working Papers 2017-39, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2017-39
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    File URL: https://crawford.anu.edu.au/sites/default/files/2025-02/39_2017_mckibbin_morris_wilcoxen_liu.pdf
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    Cited by:

    1. Bellora, Cecilia & Fontagné, Lionel, 2023. "EU in search of a Carbon Border Adjustment Mechanism," Energy Economics, Elsevier, vol. 123(C).
    2. James R. Mcfarland & Allen A. Fawcett & Adele C. Morris & John M. Reilly & Peter J. Wilcoxen, 2018. "Overview Of The Emf 32 Study On U.S. Carbon Tax Scenarios," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 1-37, February.
    3. Alexander R. Barron & Allen A. Fawcett & Marc A. C. Hafstead & James R. Mcfarland & Adele C. Morris, 2018. "Policy Insights From The Emf 32 Study On U.S. Carbon Tax Scenarios," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 1-47, February.
    4. N. B. Melnikov & A. P. Gruzdev & M. G. Dalton & M. Weitzel & B. C. O’Neill, 2021. "Parallel Extended Path Method for Solving Perfect Foresight Models," Computational Economics, Springer;Society for Computational Economics, vol. 58(2), pages 517-534, August.
    5. Sigit Perdana & Marc Vielle, 2023. "Carbon border adjustment mechanism in the transition to net-zero emissions: collective implementation and distributional impacts," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 299-329, July.
    6. Y.-H. Henry Chen & Hossein Hosseini Jebeli & Craig Johnston & Sergey Paltsev & Marie-Christine Tremblay, 2023. "An Investigation into the Effects of Border Carbon Adjustments on the Canadian Economy," Staff Working Papers 23-27, Bank of Canada.
    7. Bellora, Cecilia, 2020. "Carbon Border Adjustment and Alternatives," Conference papers 333210, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Allen A. Fawcett & James R. Mcfarland & Adele C. Morris & John P. Weyant, 2018. "Introduction To The Emf 32 Study On U.S. Carbon Tax Scenarios," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 1-7, February.
    9. Devarajan, Shanta & Go, Delfin S. & Robinson, Sherman & Thierfelder, Karen, 2022. "The Role of Trade Policy in Climate Mitigation: Carbon Border Adjustment Mechanism (CBAM)," Conference papers 333494, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Espinosa, Cristian & Gutierrez Cubillos, Pablo & Castro Nofal, Bastián, 2025. "The carbon tax as an automatic stabilizer in a commodity-producing Small Open Economy," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 835-853.
    11. Soomi Lee, 2020. "Fiscal Therapy: Curing America's Debt Addiction and Investing in the Future by William G. Gale, Cambridge, UK: Oxford University Press, 2019, 352 pp., $29.95(US), hardback," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 858-862, June.
    12. Alexander Krenek & Mark Sommer & Margit Schratzenstaller-Altzinger, 2020. "A WTO-compatible Border Tax Adjustment for the ETS to Finance the EU Budget," WIFO Working Papers 596, WIFO.
    13. Banerjee, Suvajit, 2021. "Conjugation of border and domestic carbon adjustment and implications under production and consumption-based accounting of India's National Emission Inventory: A recursive dynamic CGE analysis," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 68-86.
    14. Overland, Indra & Sabyrbekov, Rahat, 2022. "Know your opponent: Which countries might fight the European carbon border adjustment mechanism?," Energy Policy, Elsevier, vol. 169(C).
    15. Cecilia Bellora & Lionel Fontagné, 2022. "EU in Search of a WTO-Compatible Carbon Border Adjustment Mechanism," Working Papers 2022-01, CEPII research center.
    16. Alexander Krenek & Mark Sommer & Margit Schratzenstaller-Altzinger, 2019. "Sustainability-oriented Future EU Funding. A European Border Carbon Adjustment," WIFO Working Papers 587, WIFO.
    17. Matsumura, Kohei & Naka, Tomomi & Sudo, Nao, 2024. "Analysis of the transmission of carbon taxes using a multi-sector DSGE," Energy Economics, Elsevier, vol. 136(C).

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