Carbon tax, pollution and spatial location of heterogeneous firms

Nelly Exbrayat, Stephane Riou () and Skerdilajda Zanaj

No 1604, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: This paper investigates the ability of a fully harmonized carbon tax to curb carbon emissions in a globalized economy characterized by an uneven spatial distribution of heterogeneous firms. The level of the carbon tax matters for the direction of the relocation and its impact on global emissions. When the carbon tax is low enough, emissions are reduced as firms relocate to the smaller country to pay lower taxes by reducing their output. If the carbon tax is too high, then firms react by relocating to the larger country to maintain their export activity, so that the most environmentally friendly spatial configurations can be removed.

Keywords: global carbon tax; heterogeneous firms; international trade; firm location (search for similar items in EconPapers)
JEL-codes: F12 F15 F18 Q28 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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ftp://ftp.gate.cnrs.fr/RePEc/2016/1604.pdf (application/pdf)

Related works:
Working Paper: Carbon tax, pollution and spatial location of heterogeneous firms (2016)
Working Paper: Carbon tax, pollution and the spatial location of heterogeneous firms (2015)
Working Paper: Carbon tax, pollution and the spatial location of heterogeneous firms (2015)
Working Paper: Carbon tax, pollution and spatial location of heterogeneous firms (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1604

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