Greenhouse-Gas Emission Controls and Firm Locations in North–South Trade

Jota Ishikawa and Toshihiro Okubo

Environmental & Resource Economics, 2017, vol. 67, issue 4, No 1, 637-660

Abstract: Abstract This paper studies greenhouse-gas emission (GHG) controls in the presence of international carbon leakage through international firm relocation. In a new economic geography model with two countries (‘North’ and ‘South’), only North sets a target for GHG emissions. We compare the consequences of emission quotas and emission taxes under trade liberalization on location of two manufacturing sectors with different emission intensities and degrees of carbon leakage. With low trade costs, further trade liberalization increases global emissions by facilitating carbon leakage. Regulation by quotas leads to spatial sorting, resulting in less carbon leakage and less global emissions than regulation by taxes.

Keywords: Global warming; Emission tax; Emission quota; Carbon leakage; Firm relocation; Trade liberalization (search for similar items in EconPapers)
JEL-codes: F18 Q54 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://link.springer.com/10.1007/s10640-015-9991-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Greenhouse Gas Emission Controls and Firm Locations in North-South Trade (2013)
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:kap:enreec:v:67:y:2017:i:4:d:10.1007_s10640-015-9991-0

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-015-9991-0

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().