International Trade and Carbon Leakage: Working Paper 2013-08

Bruce Arnold

No 44970, Working Papers from Congressional Budget Office

Abstract: Under a broad-based carbon tax or cap-and-trade program, some of the reduction in U.S. carbon dioxide emissions would probably be offset by increases in foreign emissions that would not otherwise have occurred, a phenomenon known as carbon leakage. Industries with substantial total emissions, high trade ratios, and high emission intensities are the most likely to generate substantial leakage. Therefore, the industries most likely to be sources of significant leakage through trade in their products are the chemical; primary metal (such as aluminum and iron and steel); and,

Date: 2013-12-19
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