Consumption- Versus Production-Based Emission Policies

Michael Jakob (), Jan Steckel and Ottmar Edenhofer

Annual Review of Resource Economics, 2014, vol. 6, issue 1, 297-318

Abstract: Emission leakage could potentially undermine the effectiveness of unilateral climate policies. Significant emission transfers from developing countries to developed countries in the form of emissions embodied in trade have been interpreted as an indication of such leakage. To reduce leakage and provide an appropriate picture of countries’ responsibility for global emissions, an alternative proposal is to attribute emissions on the basis of consumption instead of production. However, as one unit of imported emissions generally cannot be equated with a corresponding increase in emissions released to the atmosphere, putting a price on emissions embodied in imports equal to the social cost of these emissions (e.g., by means of consumption-based emission pricing) is not an optimal policy. Hence, one should consider a broad scope of trade measures to reduce leakage, focusing on a few highly traded, emission-intensive industries. Finally, the optimal policy portfolio to address leakage may also contain free allocation of emission permits and sectoral approaches.

Keywords: unilateral climate policy; carbon leakage; border tax adjustment; consumption-based emission pricing (search for similar items in EconPapers)
JEL-codes: F10 F15 H41 Q20 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36) Track citations by RSS feed

Downloads: (external link)
http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-100913-012342 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
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:anr:reseco:v:6:y:2014:p:297-318

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Resource Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().