Trade in Carbon and The Effectiveness of Carbon Tariffs

Jan Schneider, Christoph Böhringer and Emmanuel Asane-Otoo

No 332476, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In the absence of a global agreement to reduce CO2 emissions single countries or regions have introduced subglobal climate policies. One major challenge associated with unilateral action is carbon leakage, i.e., the relocation of emissions from regulated to unregulated regions. A principal measure to combat carbon leakage is carbon tariffs, where embodied emissions in imports are taxed at the domestic CO2 price when crossing the border. Using combined MRIO and computable general equilibrium (CGE) analysis for the years from 1995 to 2007 based on data provided by World Input-Output Database (WIOD), we assess the potential of carbon tariffs as a means of improving the global cost-effectiveness of unilateral emission pricing. Our MRIO analysis shows increasing relevance of embodied carbon in trade. Both imports of embodied carbon in OECD countries and exports of embodied carbon from developing countries have increased substantially. However, our CGE policy simulations suggest that the effectiveness of carbon tariffs does not increase over time but the burden shifting potential from OECD to Non-OECD countries increases.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 11
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/332476/files/6977.pdf (application/pdf)

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:ags:pugtwp:332476

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().