EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes

Thomas Eichner and Rüdiger Pethig

No 2579, CESifo Working Paper Series from CESifo

Abstract: The European Union fulfills its emissions reductions commitments by means of an emissions trading scheme covering some part of each member state’s economy and by national emissions control in the rest of their economies. The member states also levy energy/emissions taxes overlapping with the trading scheme. Restricting our focus on cost-effective policies, this paper investigates the distributive consequences of increasing the overlapping emissions tax that is uniform across countries. For quasi-linear utility functions and for a class of parametric utility and production functions emissions tax increases turn out to be exactly offset by permit price reductions. As a consequence permit-exporting [permit-importing] countries lose [gain] from an increase in the emissions tax. These results are not general, however. By means of a numerical example we show that export-import reversals and welfare reversals are possible.

Keywords: emissions taxes; emissions trading; international trade (search for similar items in EconPapers)
JEL-codes: H21 H22 Q56 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp2579.pdf (application/pdf)

Related works:
Journal Article: EU-type carbon emissions trade and the distributional impact of overlapping emissions taxes (2010)
Working Paper: EU-type carbon emissions trade and the distributional impact of overlapping emissions taxes (2009)
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:ces:ceswps:_2579

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().