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 some form of 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, more particularly, 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 discusions. It also stressesâ€”a point that has been overlooked in the policy debateâ€”that the efficiency case for BTA depends critically on whether climate policies are pursued by carbon taxation or by cap-and-trade.
|Date of creation:||07 Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
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.:
- Hoel, Michael, 1994.
"Should a Carbon Tax be Differentiated Across Sectors?,"
CEPR Discussion Papers
1066, C.E.P.R. Discussion Papers.
- Hoel, Michael, 1996. "Should a carbon tax be differentiated across sectors?," Journal of Public Economics, Elsevier, vol. 59(1), pages 17-32, January.
- Hoel, M., 1993. "Should a Carbon Tax Be Differentiated Across Sectors?," Memorandum 09/1993, Oslo University, Department of Economics.
- 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.
- Chichilnisky, Graciela & Heal, Geoffrey, 1994.
"Who should abate carbon emissions? : An international viewpoint,"
Elsevier, vol. 44(4), pages 443-449, April.
- Graciela Chichilnisky & Geoffrey Heal, 1993. "Who Should Abate Carbon Emissions? An International Viewpoint," NBER Working Papers 4425, National Bureau of Economic Research, Inc.
- J. Peter Neary, 2005.
"International trade and the environment : theoretical and policy linkages,"
200018, School of Economics, University College Dublin.
- 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.
- Michael O. Moore, 2011.
"Implementing Carbon Tariffs: A Fool’s Errand?,"
The World Economy,
Wiley Blackwell, vol. 34(10), pages 1679-1702, October.
- Michael Owen Moore, 2010. "Implementing Carbon Tariffs: A Fool's Errand?," Working Papers 2010-02, The George Washington University, Institute for International Economic Policy.
- Moore, Michael O., 2010. "Implementing carbon tariffs : a fool's errand ?," Policy Research Working Paper Series 5359, The World Bank.
- Arik Levinson & M. Scott Taylor, 2004.
"Unmasking the Pollution Haven Effect,"
NBER Working Papers
10629, 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.
- 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.
- 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.
- 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.
- Brian R. Copeland & M. Scott Taylor, 2003.
"Trade, Growth and the Environment,"
NBER Working Papers
9823, National Bureau of Economic Research, Inc.
- 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.
- Baumol,William J. & Oates,Wallace E., 1988.
"The Theory of Environmental Policy,"
Cambridge University Press, number 9780521311120, 1.
- 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, December.
- 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.
- 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.
- Daniel Gros, 2009. "Global Welfare Implications of Carbon Border Taxes," CESifo Working Paper Series 2790, CESifo Group Munich.
- Markusen, James R., 1975. "International externalities and optimal tax structures," Journal of International Economics, Elsevier, vol. 5(1), pages 15-29, February.
- 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.
- 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.
- 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.
- Michael Keen & David Wildasin, 2004. "Pareto-Efficient International Taxation," American Economic Review, American Economic Association, vol. 94(1), pages 259-275, March.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:12/289. 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: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.