EconPapers    
Economics at your fingertips  
 

Towards a Just and Cost-Effective Climate Policy: On the relevance and implications of deciding between a Production versus Consumption Based Approach

Karl Steininger (), Christian Lininger (), Susanne Droege, Dominic Roser and Luke Tomlinson
Additional contact information
Christian Lininger: Karl-Franzens University of Graz
Susanne Droege: SWP - German Institute for International and Security Affairs
Dominic Roser: Karl-Franzens University of Graz
Luke Tomlinson: University of Oxford

Authors registered in the RePEc Author Service: Susanne Dröge

No 2012-06, Graz Economics Papers from University of Graz, Department of Economics

Abstract: The bottom-up national approaches to implement global climate policy under the current United Nations scheme raise concerns about carbon leakage and distributive justice. To limit these concerns, some propose switching to a consumption based emission accounting principle and implementing an associated policy reorientation. We analyse the potential merits of such a switch to a consumption-based approach, in the context of unilateral climate policies implemented by a border adjustment for the carbon content of imports and exports. First, we look into the relationship between the accounting principle and justice considerations. We distinguish the Responsibility Question (Do consumers' or producers' choices bring the emissions about?) and the Policy Base Question (Should consumption or production serve as the policy base?). Second, we investigate whether following a consumption- versus production-based policy implies a difference in terms of costeffectiveness in achieving the environmental target. We find that consumers and producers are jointly responsible for emissions. We also find that from the perspective of justice this does not settle the question whether consumption or production ought to serve as the climate policy base. Rather, this depends on the distributive consequences of switching to consumption-based accounting. We find that (global) costeffectiveness is currently higher when unilateral climate policy by industrialized countries is consumption-based, and accompanied by clean technology transfer. If implemented in terms of border carbon adjustments, justice considerations suggest channeling import tax revenues to developing and emerging economies. We also find that the carbon border adjustment switch need not include export rebates, if these are difficult on political grounds.

Keywords: post 2012 climate policies; CBDR; competitiveness; carbon leakage; border carbon adjustments (search for similar items in EconPapers)
JEL-codes: F42 Q56 (search for similar items in EconPapers)
Date: 2012-11
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: Track citations by RSS feed

Downloads: (external link)
http://www100.uni-graz.at/vwlwww/forschung/RePEc/wpaper/2012-06.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:grz:wpaper:2012-06

Ordering information: This working paper can be ordered from
http://www100.uni-graz.at/vwlwww/forschung/RePEc/

Access Statistics for this paper

More papers in Graz Economics Papers from University of Graz, Department of Economics University of Graz, Universitaetsstr. 15/F4, 8010 Graz, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Michael Scholz ().

 
Page updated 2023-01-20
Handle: RePEc:grz:wpaper:2012-06