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Embodied Carbon Tariffs

Author

Listed:
  • Christoph Böhringer

    (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra)

  • Jared C. Carbone

    (University of Calgary and Resources for the Future, Department of Economics)

  • Thomas F. Rutherford

    (University of Wisconsin, Madison)

Abstract

Embodied carbon tariffs tax the direct and indirect carbon emissions embodied in trade — an idea popularized by countries seeking to extend the reach of domestic carbon regulations. We investigate their effectiveness using simulations from an applied general equilibrium model of global trade and energy use. We find that the tariffs do reduce foreign emissions, but their ability to improve the global cost-effectiveness of climate policy is limited. Their main welfare effect is to shift the burden of developed-world climate policies to the developing world.

Suggested Citation

  • Christoph Böhringer & Jared C. Carbone & Thomas F. Rutherford, 2013. "Embodied Carbon Tariffs," ZenTra Working Papers in Transnational Studies 25 / 2014, ZenTra - Center for Transnational Studies, revised Jan 2014.
  • Handle: RePEc:zen:wpaper:25
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    climate policy; border tax adjustments; carbon leakage;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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