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Carbon tax, pollution and spatial location of heterogeneous firms

Author

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  • Nelly Exbrayat

    (Jean Monnet University, IAE, Saint-Etienne)

  • Stéphane Riou

    (Jean Monnet University, IAE, Saint-Etienne)

  • Skerdilajda Zanaj

    (CREA, Université de Luxembourg)

Abstract

In this paper, we investigate the e¤ects of a global carbon tax and its ability to curb carbon emissions in a two-country setup characterized by an uneven spatial distribution of mobile heterogeneous firms. Trade takes place between the two asymmetric countries and carbon dioxide (CO2) emissions are a by-product of the production activity of manufac- turing firms. We advance the hypothesis that although a global carbon tax is an attractive environmental measure, it may be subject to debate because, among other effects, it can have a significant impact on the location of heterogeneous firms as well as on foreign trade patterns worldwide.

Suggested Citation

  • Nelly Exbrayat & Stéphane Riou & Skerdilajda Zanaj, 2015. "Carbon tax, pollution and spatial location of heterogeneous firms," DEM Discussion Paper Series 15-17, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:15-17
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    Cited by:

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    2. Olner, Dan & Mitchell, Gordon & Heppenstall, Alison & Pryce, Gwilym, 2020. "The spatial economics of energy justice: modelling the trade impacts of increased transport costs in a low carbon transition and the implications for UK regional inequality," Energy Policy, Elsevier, vol. 140(C).

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    More about this item

    Keywords

    Global carbon tax: spatial selection; heterogeneous firms;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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