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Trade In Carbon And The Effectiveness Of Carbon Tariffs

Author

Listed:
  • Böhringer, Christoph
  • Schneider, Jan
  • Asane-Otoo, Emmanuel
Abstract
Carbon-based import tariffs are discussed as policy measures to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We assess how the potential of carbon tariffs to increase cost-effectiveness of unilateral climate policy depends on the magnitude and composition of carbon embodied in trade. For our assessment, we combine multi-region input-output (MRIO) analysis with computable general equilibrium (CGE) analysis based on data from the World Input-Output Database (WIOD) for the period 1995 to 2007. The MRIO analysis confirms that carbon embodied in trade has sharply increased during this period. Yet, the CGE analysis suggests that the effectiveness of carbon tariffs in reducing leakage and improving global-cost effectiveness of unilateral climate policy does not increase over time, whereas the potential to shift the economic burden of CO2 emissions reduction from abating developed regions to non-abating developing regions increases substantially.

Suggested Citation

  • Böhringer, Christoph & Schneider, Jan & Asane-Otoo, Emmanuel, 2016. "Trade In Carbon And The Effectiveness Of Carbon Tariffs," VfS Annual Conference 2016 (Augsburg): Demographic Change 145628, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145628
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    References listed on IDEAS

    as
    1. Christoph Böhringer & Jared C. Carbone & Thomas F. Rutherford, 2016. "The Strategic Value of Carbon Tariffs," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 28-51, February.
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    Cited by:

    1. Yang, Changjiang & Yan, Xiaoxuan, 2023. "Impact of carbon tariffs on price competitiveness in the era of global value chain," Applied Energy, Elsevier, vol. 336(C).
    2. Thomas Kuhn & Radomir Pestow & Anja Zenker, 2019. "Building Climate Coalitions on Preferential Free Trade Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 539-569, October.
    3. Lien-Chieh Lee & Yuan Wang & Yuanyuan Yan & Jian Zuo, 2018. "Greenhouse Gas Emissions Embodied in the Chinese International Trade of Computer Products," Sustainability, MDPI, vol. 10(5), pages 1-15, May.

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    More about this item

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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