Is Environmental Tax Harmonization Desirable in Global Value Chains?

Haitao Cheng, Hayato Kato and Ayako Obashi ()

No 19-13, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: The current globalization is characterized by the spatial unbundling of parts production and assembly, leading to the dispersion of pollution. We study environmental taxes in a two-country model of global value chains in which the location of parts and assembly can di er. When unbundling costs are so high that parts and assembly must co-locate in the pre-globalized world, pollution is spatially concentrated and harmonizing environmental taxes maximizes the global welfare. By contrast, under low unbundling costs triggering the dispersion of parts and thus of pollution in the world today, the harmonization does not maximize the global welfare.

Keywords: Environmental policy; Fragmentation; International coordination (search for similar items in EconPapers)
JEL-codes: F18 F23 Q56 Q58 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2019-09
New Economics Papers: this item is included in nep-agr, nep-env, nep-int and nep-res
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Related works:
Journal Article: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2021)
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2020)
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2020)
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1913

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