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Is Environmental Tax Harmonization Desirable in Global Value Chains?

Haitao Cheng, Hayato Kato and Ayako Obashi ()

No 19-13-Rev., Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: The spatialunbundlingofpartsproductionandassemblycurrentlycharacterizes globalization, leadingtotheworldwidedispersionofpollution.Weconsidersociallyop- timal (cooperative)environmentaltaxesinatwo-countrymodelofglobalvaluechains in whichthelocationofbothpartsandassemblycandi er.Whenunbundlingcosts are sohighthatpartsandassemblymustcolocateinthepre-globalizedworld,pollu- tion isspatiallyconcentrated,andharmonizingenvironmentaltaxesmaximizesglobal welfare.Incontrast,withlowunbundlingcoststriggeringthedispersionofpartsand thuspollutionthroughouttheworldastoday,harmonizationfailstomaximizeglobal welfare.Similarresultsholdwhenthetwocountriesnon-cooperativelychoosetheir environmentaltaxes.

Keywords: Environmentalpolicy; Fragmentation; Emissiontaxcompetition; International coordination; Tradeinpartsandcomponents (search for similar items in EconPapers)
JEL-codes: F18 F23 Q56 Q58 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020-05
New Economics Papers: this item is included in nep-agr, nep-env, nep-int and nep-pub
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http://www2.econ.osaka-u.ac.jp/econ_society/dp/1913R.pdf (application/pdf)

Related works:
Journal Article: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2021) Downloads
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2020) Downloads
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2020) Downloads
Working Paper: Is Environmental Tax Harmonization Desirable in Global Value Chains? (2019)
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