Towards a Just and Cost-Effective Climate Policy: On the relevance and implications of deciding between a Production versus Consumption Based Approach
The bottom-up national approaches to implement global climate policy under the current United Nations scheme raise concerns about carbon leakage and distributive justice. To limit these concerns, some propose switching to a consumption based emission accounting principle and implementing an associated policy reorientation. We analyse the potential merits of such a switch to a consumption-based approach, in the context of unilateral climate policies implemented by a border adjustment for the carbon content of imports and exports. First, we look into the relationship between the accounting principle and justice considerations. We distinguish the Responsibility Question (Do consumers' or producers' choices bring the emissions about?) and the Policy Base Question (Should consumption or production serve as the policy base?). Second, we investigate whether following a consumption- versus production-based policy implies a difference in terms of costeffectiveness in achieving the environmental target. We find that consumers and producers are jointly responsible for emissions. We also find that from the perspective of justice this does not settle the question whether consumption or production ought to serve as the climate policy base. Rather, this depends on the distributive consequences of switching to consumption-based accounting. We find that (global) costeffectiveness is currently higher when unilateral climate policy by industrialized countries is consumption-based, and accompanied by clean technology transfer. If implemented in terms of border carbon adjustments, justice considerations suggest channeling import tax revenues to developing and emerging economies. We also find that the carbon border adjustment switch need not include export rebates, if these are difficult on political grounds.
|Date of creation:||Nov 2012|
|Date of revision:|
|Contact details of provider:|| Postal: University of Graz, Universitaetsstr. 15/F4, 8010 Graz, Austria|
Phone: ++43 316 380-3440
Fax: ++43 316 380-9520, 9521
Web page: http://volkswirtschaftslehre.uni-graz.at/
More information through EDIRC
|Order Information:||Web: http://www-classic.uni-graz.at/vwlwww/forschung/RePEc/|
References listed on IDEAS
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.:
- Bednar-Friedl, Birgit & Schinko, Thomas & Steininger, Karl W., 2012. "The relevance of process emissions for carbon leakage: A comparison of unilateral climate policy options with and without border carbon adjustment," Energy Economics, Elsevier, vol. 34(S2), pages S168-S180.
- Susanne Droege, 2011. "Using border measures to address carbon flows," Climate Policy, Taylor & Francis Journals, vol. 11(5), pages 1191-1201, September.
- Susanne Droege, 2011. "Do border measures have a role in climate policy?," Climate Policy, Taylor & Francis Journals, vol. 11(5), pages 1185-1190, September.
- Jean-Marc Burniaux & Jean Château & Romain Duval, 2010.
"Is there a Case for Carbon-Based Border Tax Adjustment?: An Applied General Equilibrium Analysis,"
OECD Economics Department Working Papers
794, OECD Publishing.
- 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.
- Fischer, Carolyn & Fox, Alan K., 2012. "Comparing policies to combat emissions leakage: Border carbon adjustments versus rebates," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 199-216.
- Wiedmann, Thomas, 2009. "A review of recent multi-region input-output models used for consumption-based emission and resource accounting," Ecological Economics, Elsevier, vol. 69(2), pages 211-222, December.
- Peters, Glen P., 2008. "From production-based to consumption-based national emission inventories," Ecological Economics, Elsevier, vol. 65(1), pages 13-23, March.
- Munksgaard, Jesper & Pedersen, Klaus Alsted, 2001. "CO2 accounts for open economies: producer or consumer responsibility?," Energy Policy, Elsevier, vol. 29(4), pages 327-334, March.
- Wyckoff, Andrew W. & Roop, Joseph M., 1994. "The embodiment of carbon in imports of manufactured products : Implications for international agreements on greenhouse gas emissions," Energy Policy, Elsevier, vol. 22(3), pages 187-194, March.
- Kuik, Onno & Hofkes, Marjan, 2010. "Border adjustment for European emissions trading: Competitiveness and carbon leakage," Energy Policy, Elsevier, vol. 38(4), pages 1741-1748, April.
- Ferng, Jiun-Jiun, 2003. "Allocating the responsibility of CO2 over-emissions from the perspectives of benefit principle and ecological deficit," Ecological Economics, Elsevier, vol. 46(1), pages 121-141, August.
- Satoshi Nakano & Asako Okamura & Norihisa Sakurai & Masayuki Suzuki & Yoshiaki Tojo & Norihiko Yamano, 2009. "The Measurement of CO2 Embodiments in International Trade: Evidence from the Harmonised Input-Output and Bilateral Trade Database," OECD Science, Technology and Industry Working Papers 2009/3, OECD Publishing.
- Lenzen, Manfred & Murray, Joy & Sack, Fabian & Wiedmann, Thomas, 2007. "Shared producer and consumer responsibility -- Theory and practice," Ecological Economics, Elsevier, vol. 61(1), pages 27-42, February.
- Bastianoni, Simone & Pulselli, Federico Maria & Tiezzi, Enzo, 2004. "The problem of assigning responsibility for greenhouse gas emissions," Ecological Economics, Elsevier, vol. 49(3), pages 253-257, July.
- Barker, Terry & Junankar, Sudhir & Pollitt, Hector & Summerton, Philip, 2007. "Carbon leakage from unilateral Environmental Tax Reforms in Europe, 1995-2005," Energy Policy, Elsevier, vol. 35(12), pages 6281-6292, December.
- Muñoz, Pablo & Steininger, Karl W., 2010. "Austria's CO2 responsibility and the carbon content of its international trade," Ecological Economics, Elsevier, vol. 69(10), pages 2003-2019, August.
When requesting a correction, please mention this item's handle: RePEc:grz:wpaper:2012-06. 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: (Michael Scholz)
If references are entirely missing, you can add them using this form.