Are carbon tariffs climate policy?

Gregory Casey, Kyle C. Meng and Ivan Rudik
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Ivan Rudik: Cornell University

No 3aw8s_v1, SocArXiv from Center for Open Science

Abstract: Carbon import tariffs, traditionally considered a complement to domestic climate policy, are increasingly proposed as standalone policies. We build a quantitative trade model to compare U.S. carbon tariffs with and without a domestic carbon tax, each applied to a set of carbon-intensive, trade-exposed sectors. We find three main results. First, a U.S. carbon tariff increases U.S. emissions, lowers foreign emissions, and on net achieves half the global emissions reductions of the combined policy, which lowers both U.S. and foreign emissions. Second, both approaches increase U.S. GDP and welfare, but the combined policy has a larger effect due to terms of trade improvements. Third, global emissions reductions from multilateral tariff-only agreements are modest and do not increase monotonically with greater membership, whereas under combined policies they scale considerably with membership.

Date: 2026-06-09
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:3aw8s_v1

DOI: 10.31219/osf.io/3aw8s_v1

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