Carbon pricing of international transport fuels: Impacts on carbon emissions and trade activity

Gabriela Mundaca, Jon Strand and Ian R. Young

Journal of Environmental Economics and Management, 2021, vol. 110, issue C

Abstract: We study the impacts of carbon taxation of international transport fuels on CO2 emissions and trade activity, focusing on maritime transport, which constitutes the most important international trade transport activity. Our estimated bunker price elasticities range from −0.03 to −0.42. For the current level of international trade, a global tax of US$ 40 per ton of CO2 will reduce CO2 emissions by 7.65% for the heaviest traded products (at the 6-digit HS level of aggregation) transported by sea. The greatest CO2 emission reductions are for products with relatively low value-to-weight ratios such as fossil fuels and ores. Using our estimates, we present a plan with a gradual increase in the carbon tax, including some transition to zero emissions vessels, for reaching the emissions target of the International Maritime Organization by 2050. We compare the reduction in CO2 emissions with a carbon tax policy with CO2 reductions with a feebate policy.

Keywords: CO2 emissions; Maritime trade; Carbon taxation; Feebate (search for similar items in EconPapers)
JEL-codes: F14 F18 F64 H23 H87 Q54 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:110:y:2021:i:c:s009506962100084x

DOI: 10.1016/j.jeem.2021.102517

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