IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v70y2017i2p421-446.html
   My bibliography  Save this article

The Design of Border Adjustments for Carbon Prices

Author

Listed:
  • Samuel Kortum
  • David Weisbach

Abstract

We consider the economics and the design of border adjustments (BAs) under a carbon tax. BAs under a carbon tax are taxes on imports and rebates on exports, based on the emissions from the production of a good. They are thought to be a method of reducing inefficiencies from a unilateral carbon price, such as shifts in the location of production, known as leakage. After examining the basic economics of BAs, we examine three design issues: which goods BAs should apply to, which emissions from the production of those goods should be taxed, and from and to which countries BAs should apply. We conclude that BAs will impose high administrative costs and need stronger welfare justifications.

Suggested Citation

  • Samuel Kortum & David Weisbach, 2017. "The Design of Border Adjustments for Carbon Prices," National Tax Journal, National Tax Association;National Tax Journal, vol. 70(2), pages 421-446, June.
    • Handle: RePEc:ntj:journl:v:70:y:2017:i:2:p:421-446
    DOI: 10.17310/ntj.2017.2.07
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2017.2.07
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2017.2.07?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rosa van den Ende & Antoine Mandel & Agnieszka Rusinowska, 2023. "Network-based allocation of responsibility for GHG emissions," Post-Print halshs-04188365, HAL.
    2. George David Banks & Timothy Fitzgerald, 2020. "A sectoral approach allows an artful merger of climate and trade policy," Climatic Change, Springer, vol. 162(2), pages 165-173, September.
    3. Perdana, Sigit & Vielle, Marc, 2022. "Making the EU Carbon Border Adjustment Mechanism acceptable and climate friendly for least developed countries," Energy Policy, Elsevier, vol. 170(C).
    4. Michael A. Mehling, 2023. "Supply-side offset crediting to manage climate policy spillover effects," Working Papers EPRG2313, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    5. Miria A. Pigato, 2019. "Fiscal Policies for Development and Climate Action," World Bank Publications - Books, The World Bank Group, number 31051.
    6. Ambec, Stefan, 2022. "The European Union’s Carbon Border Adjustment Mechanism: Challenges and Perspectives," TSE Working Papers 22-1365, Toulouse School of Economics (TSE).
    7. Tian Lan & Ran Tao, 2024. "Research on the Inhibitory Effect of the EU’s Carbon Border Adjustment Mechanism on Carbon Leakage," Sustainability, MDPI, vol. 16(17), pages 1-21, August.
    8. Cheng, Haitao, 2021. "Border carbon adjustments with endogenous assembly locations," Economic Modelling, Elsevier, vol. 105(C).
    9. Viola Becattini & Paolo Gabrielli & Linda Frattini & David Weisbach & Marco Mazzotti, 2022. "A two-step carbon pricing scheme enabling a net-zero and net-negative CO $$_2$$ 2 -emissions world," Climatic Change, Springer, vol. 171(1), pages 1-22, March.
    10. Lai, Yu-Bong, 2024. "Policy linkages, country size, and international capital distribution," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    11. Haitao CHENG & ISHIKAWA Jota, 2021. "Carbon Tax and Border Tax Adjustments with Technology and Location Choices," Discussion papers 21030, Research Institute of Economy, Trade and Industry (RIETI).
    12. Zhong, Jiarui & Pei, Jiansuo, 2022. "Beggar thy neighbor? On the competitiveness and welfare impacts of the EU's proposed carbon border adjustment mechanism," Energy Policy, Elsevier, vol. 162(C).
    13. Carattini, Stefano & Kim, Giseong & Melkadze, Givi & Pommeret, Aude, 2024. "Carbon taxes and tariffs, financial frictions, and international spillovers," European Economic Review, Elsevier, vol. 170(C).
    14. Warwick J. Mckibbin & Adele C. Morris & Peter J. Wilcoxen & Weifeng Liu, 2018. "The Role Of Border Carbon Adjustments In A U.S. Carbon Tax," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 1-41, February.
    15. Mehling, M. A., 2023. "Supply-Side Crediting to Manage Climate Policy Spillover Effects," Cambridge Working Papers in Economics 2345, Faculty of Economics, University of Cambridge.
    16. Claire Brunel & Arik Levinson, 2024. "Carbon Tariffs 101," Working Papers gueconwpa~24-24-05, Georgetown University, Department of Economics.
    17. Overland, Indra & Sabyrbekov, Rahat, 2022. "Know your opponent: Which countries might fight the European carbon border adjustment mechanism?," Energy Policy, Elsevier, vol. 169(C).
    18. Alex Borodin & Vladislav Zaitsev & Zahid F. Mamedov & Galina Panaedova & Andrey Kulikov, 2022. "Mechanisms for Tax Regulation of CO 2 -Equivalent Emissions," Energies, MDPI, vol. 15(19), pages 1-15, September.
    19. Levent Aydın, 2018. "The possible macroeconomic and sectoral impacts of carbon taxation on Turkey’s economy: A computable general equilibrium analyses," Energy & Environment, , vol. 29(5), pages 784-801, August.
    20. Strand,Jon, 2021. "Incentivizing Carbon Taxation in Low-Income Countries : Tax Rebating versus Carbon Crediting," Policy Research Working Paper Series 9698, The World Bank.
    21. Stefano Carattini & Giseong Kim & Givi Melkadze & Aude Pommeret, 2023. "Carbon Taxes and Tariffs, Financial Frictions, and International Spillovers," CESifo Working Paper Series 10851, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:70:y:2017:i:2:p:421-446. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.