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Alternative designs for tariffs on embodied carbon. A global cost-effectiveness analysis

  • Christoph Böhringer
  • Brita Bye
  • Taran Fæhn
  • Knut Einar Rosendahl


    (Statistics Norway)

In the absence of effective world-wide cooperation to curb global warming, import tariffs on embodied carbon have been proposed as a potential supplement to unilateral emissions pricing. We consider alternative designs for such tariffs, and analyze their effects on global welfare within a multi-region, multi-sector computable general equilibrium (CGE) model of global trade and energy. Our analysis suggests that the most cost-efficient policy could be region-specific tariffs on all products, based on direct plus electricity emissions. In the end, however, the potential cost savings through carbon tariffs must be weighed against the administrative costs as well as legal issues and political considerations.

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Paper provided by Statistics Norway, Research Department in its series Discussion Papers with number 682.

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Date of creation: Feb 2012
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Handle: RePEc:ssb:dispap:682
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  1. Christoph Böhringer & Jared C. Carbone & Thomas F. Rutherford, 2011. "Embodied Carbon Tariffs," NBER Working Papers 17376, National Bureau of Economic Research, Inc.
  2. Böhringer, Christoph & Fischer, Carolyn & Einar Rosendahl, Knut, 2011. "Cost-Effective Unilateral Climate Policy Design: Size Matters," Discussion Papers dp-11-34, Resources For the Future.
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  7. Aaditya Mattoo & Arvind Subramanian & Dominique van der Mensbrugghe & Jianwu He, 2009. "Reconciling Climate Change and Trade Policy," Working Papers 189, Center for Global Development.
  8. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
  9. Boehringer Christoph & Fischer Carolyn & Rosendahl Knut Einar, 2010. "The Global Effects of Subglobal Climate Policies," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(2), pages 1-35, December.
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  12. Daniel Gros, 2009. "Global Welfare Implications of Carbon Border Taxes," CESifo Working Paper Series 2790, CESifo Group Munich.
  13. repec:zbw:hohpro:340 is not listed on IDEAS
  14. Reyer Gerlagh & Onno Kuik, 2007. "Carbon Leakage with International Technology Spillovers," Working Papers 2007.33, Fondazione Eni Enrico Mattei.
  15. Gary Clyde Hufbauer & Steve Charnovitz & Jisun Kim, 2009. "Global Warming and the World Trading System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4280, January.
  16. Niven Winchester, 2012. "The Impact of Border Carbon Adjustments Under Alternative Producer Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 354-359.
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