Optimal environmental border adjustments under the General Agreement on Tariffs and Trade

Edward Balistreri, Daniel Kaffine and Hidemichi Yonezawa

No 16/235, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: A country's optimal environmental border policy includes a strategic component that is inconsistent with commitments under the General Agreement on Tariffs and Trade (GATT). We extend the theory to include GATT compliance. Theory supports optimal border adjustments on carbon content that are below the domestic carbon price, because price signals sent through border adjustments encourage consumption of emissions intensive goods in unregulated regions. The theory is supported in our applied numeric simulations. Countries imposing border adjustments at the domestic carbon price will be extracting rents from unregulated regions at the expense of ecient environmental policy and consistency with international trade law.

Keywords: climate policy; border tax adjustments; carbon leakage; trade and carbon taxes (search for similar items in EconPapers)
JEL-codes: F13 F18 Q54 Q56 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-03
New Economics Papers: this item is included in nep-env, nep-int and nep-res
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cer.ethz.ch/content/dam/ethz/special-in ... papers/WP-16-235.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not found UA (http://www.cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-16-235.pdf [301 Moved Permanently]--> https://www.cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-16-235.pdf [301 Moved Permanently]--> https://cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-16-235.pdf)

Related works:
Working Paper: Optimal Environmental Border Adjustments Under the General Agreement on Tariffs and Trade (2020)
Journal Article: Optimal Environmental Border Adjustments Under the General Agreement on Tariffs and Trade (2019)
Working Paper: Optimal Environmental Border Adjustments Under the General Agreement on Tariffs and Trade (2019)
Working Paper: Optimal environmental border adjustments under the General Agreement on Tariffs and Trade (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:16-235

Access Statistics for this paper

More papers in CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich Contact information at EDIRC.
Bibliographic data for series maintained by ().