Climate policy and border tax adjustments: Might industrial organization matter?
Ian Sheldon () and
Additional contact information
Steve McCorriston: University of Exeter
EconoQuantum, Revista de Economia y Negocios, 2012, vol. 9, issue 2, 7-28
In this paper, analysis is presented relating to the impact of border tax adjustments for climate policy on the problem of carbon leakage, and the related issue of competitiveness of energy-intensive industries. Compared to the current literature, these policies are set in the context of a vertically-related market characterized by successive oligopoly. Specifically, it is shown that an appropriate border tax adjustment depends on the incidence of domestic climate policy, the nature of competition in upstream and downstream sectors, as well as the basis for assessing the trade neutrality of any border tax adjustment. If trade neutrality is defined in terms of market volume, even though carbon leakage is reduced, domestic firm competitiveness cannot be maintained. This compares to defining trade neutrality in terms of market share, which results in domestic competitiveness being maintained and global carbon emissions being reduced. In either case, consumers incur deadweight losses.
Keywords: climate policy; carbon leakage; border tax adjustments; industrial organization. (search for similar items in EconPapers)
JEL-codes: H87 Q38 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://econoquantum.cucea.udg.mx/wp-content/upload ... m.-2-Ian-Sheldon.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:qua:journl:v:9:y:2012:i:2:p:7-28
Access Statistics for this article
EconoQuantum, Revista de Economia y Negocios is currently edited by Mauricio Ramirez Grajeda
More articles in EconoQuantum, Revista de Economia y Negocios from Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia. Contact information at EDIRC.
Bibliographic data for series maintained by Sandra Ivett Portugal Padilla ().