Targeted carbon tariffs. Carbon leakage and welfare effects

Christoph Böhringer, Brita Bye (), Taran Fæhn () and Knut Einar Rosendahl

Discussion Papers from Statistics Norway, Research Department

Abstract: Climate effects of unilateral carbon policies are undermined by carbon leakage. To counteract leakage and increase global cost-effectiveness carbon tariffs can be imposed on the emissions embodied in imports from non-regulating regions. We present a theoretical analysis on the economic incentives for emission abatement of producers subjected to carbon tariffs. We quantify the impacts of different carbon tariff designs by an empirically based multi-sector, multi-region CGE model of the global economy. We find that firm-targeted tariffs can deliver much stronger leakage reduction and higher efficiency gains than tariff designs operated at the industry level. In particular, because the exporters are able to reduce their carbon tariffs by adjusting emissions, their competitiveness and the overall welfare of their economies will be less randomly and less adversely affected than in previously studied carbon tariff regimes. This beneficial distributional impact could facilitate a higher degree of legitimacy and legality of carbon tariffs.

Keywords: carbon leakage; border carbon adjustment; carbon tariffs; computable general equilibrium (CGE) (search for similar items in EconPapers)
JEL-codes: D61 H2 Q43 Q54 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-ene, nep-env, nep-int and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.ssb.no/en/forskning/discussion-papers/_attachment/222851 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: Targeted carbon tariffs. Carbon leakage and welfare effects (2015)
Working Paper: Targeted carbon tariffs - Carbon leakage and welfare effects (2015)
Working Paper: Targeted carbon tariffs - Carbon leakage and welfare effects (2015)
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:ssb:dispap:805

Ordering information: This working paper can be ordered from
https://www.ssb.no/e ... geted-carbon-tariffs

Access Statistics for this paper

More papers in Discussion Papers from Statistics Norway, Research Department P.O.Box 8131 Dep, N-0033 Oslo, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by L Maasø ().