Fair, optimal or detrimental? Environmental vs. strategic use of border carbon adjustment
نویسندگان
چکیده
We carry out a detailed sensitivity analysis of border carbon adjustment (rates) by applying a global Computable General Equilibrium (CGE) GTAP7-based model. We find different incentives for the regions in the climate coalition to raise carbon-based border tax rates (BTAX) above the standard rate that mimics an equalisation of carbon prices across regions. Herein, the strategic use of BTAX (the manipulation of the terms of trade) is stronger for all coalition regions than the environmental use (the reduction of carbon emissions abroad). Higher BTAX can reduce carbon leakage but with a declining marginal effect. Furthermore, we find different incentives for regions outside the coalition to oppose high BTAX rates: Russia and the other energy exporters would oppose it, while the Low-Income Countries would not because of benefits from the trade diversion effect. Thus, BTAX encourages the former to join the coalition, while compensating transfers are necessary to encourage the other (developing) countries including China and India.
منابع مشابه
Carbon - related border tax adjustment : mitigating climate change or restricting international trade ?
Border tax adjustments in the form of carbon taxes on products from countries with lax environmental production standards or in the form of a required participation in an emissions allowances’ trading system have become a heavily debated issue under WTO law. Such an adjustment might be permissible if energy taxes as indirect taxes are applied on inputs during the production process. Compliance ...
متن کاملThe Strategic Implications of Setting Border Tax Adjustments
In order not to see their climate mitigation efforts be in vain by the unlimited growth in China and India, the developed world has started to consider imposing border tax adjustments on imports from these fast developing countries. This paper puts this problem into a game-theoretic perspective. It sets up the problem as a game between the developed world deciding on three regimes of border tax...
متن کاملSelf-enforcing environmental agreements and capital mobility
In a multi-country model with mobile capital and global pollution this paper analyzes the stability of self-enforcing environmental agreements (IEAs) when the coalition formed by the signatory countries plays Nash. In accordance with previous environmental literature we show that there exists a unique self-enforcing IEA consisting of two or three signatory countries if emissions tax rates are s...
متن کاملThe Comparative of Written Exposure Therapy (WET) Vs Mindfulness on Mental Adjustment and Quality of Life in women with Breast Cancer
Introduction: Many breast cancer patients experience significant distress immediately following the completion of primary treatment. Women who report low levels of quality of life (QOL) early in this phase of transitional survivorship tend to experience diminished long-term adjustment. Therefore, the present study aims were to compare the effect of written exposure therapy and mindfulness on me...
متن کامل“Competitiveness, Carbon Leakage, and Border Tax Adjustments: Might Imperfect Competition Matter?”
In this paper, analysis is presented relating to the impact of border tax adjustments for climate policy on the international competitiveness of energy-intensive industries, and the related problem of carbon leakage. While many of the economic and legal issues are not particularly new, climate policy does present some possible twists to the analysis of border tax adjustments when vertically-rel...
متن کامل