EconPapers    
Economics at your fingertips  
 

On the effects of unilateral environmental policy on offshoring in multi-stage production processes

Oliver Schenker, Simon Koesler and Andreas Löschel

Canadian Journal of Economics, 2018, vol. 51, issue 4, 1221-1256

Abstract: We extend the literature on global supply chains by analyzing if and how unilateral environmental regulation induces offshoring. We develop an analytical model of two-stage production processes that can be distributed between two countries and investigate unilateral emission pricing and its supplementation with border carbon taxes. In contrast to existing final good models, we are able to show how impacts of regulation differ across the different stages of the supply chain, depending on the interplay of comparative advantages and general equilibrium effects. To get a more comprehensive picture, we subsequently apply a computable general equilibrium model that includes a representation of international supply chains. We find heterogeneous but mostly positive effects of a unilateral carbon emission reduction by the European Union on the degree of vertical specialization of European industries. Border taxes are successful in protecting upstream industries, but with negative side effects for downstream industries.

JEL-codes: C68 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/caje.12354 (text/html)
access restricted to subscribers

Related works:
Journal Article: On the effects of unilateral environmental policy on offshoring in multi‐stage production processes (2018) Downloads
Working Paper: On the effects of unilateral environmental policy on offshoring in multi-stage production processes (2014) Downloads
Working Paper: On the effects of unilateral environmental policy on offshoring in multi-stage production processes (2014) Downloads
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:cje:issued:v:51:y:2018:i:4:p:1221-1256

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().

 
Page updated 2025-03-24
Handle: RePEc:cje:issued:v:51:y:2018:i:4:p:1221-1256