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Regional Trade Agreements, Emissions Bubbles, and Carbon Tariff Harmonization

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  • Yazid Dissou
  • Muhammad Shahid Siddiqui

Abstract

In the context of sub-global participation in greenhouse gas mitigation efforts, this paper investigates the effectiveness of a Canada-U.S. emissions bubble under their existing regional trade agreement. It also explores the potential economic impact of carbon tariff harmonization through the implementation of a common Canada-U.S. external border tariff adjustment as a mean to address competitiveness issues. Using a multi-region, multi-sector computable general equilibrium model, the paper finds that the creation of an emission bubble between the two countries could improve efficiency. The findings also suggest that a carbon tariff harmonization policy could give rise to distributional issues among Annex I regions and could fail to mitigate the negative competitiveness impacts of carbon abatement policies. http://dx.doi.org/10.5547/01956574.34.2.3

Suggested Citation

  • Yazid Dissou & Muhammad Shahid Siddiqui, 2013. "Regional Trade Agreements, Emissions Bubbles, and Carbon Tariff Harmonization," The Energy Journal, , vol. 34(2), pages 59-90, April.
    • Handle: RePEc:sae:enejou:v:34:y:2013:i:2:p:59-90
    DOI: 10.5547/01956574.34.2.3
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    Cited by:

    1. Siddiqui, Muhammad Shahid, 2015. "Environmental taxes and international spillovers: The case of a small open economy," Energy Economics, Elsevier, vol. 48(C), pages 70-80.
    2. Achtnicht, Martin & Madlener, Reinhard, 2014. "Factors influencing German house owners' preferences on energy retrofits," Energy Policy, Elsevier, vol. 68(C), pages 254-263.
    3. Wasi, Nada & Carson, Richard T., 2013. "The influence of rebate programs on the demand for water heaters: The case of New South Wales," Energy Economics, Elsevier, vol. 40(C), pages 645-656.
    4. Jeremiás Máté Balogh & Tamás Mizik, 2021. "Trade–Climate Nexus: A Systematic Review of the Literature," Economies, MDPI, vol. 9(3), pages 1-19, June.
    5. Balogh, Jeremiás Máté, 2021. "A kereskedelmi megállapodások szerepe a klímaváltozásban. Szakirodalmi áttekintés [The role of trade agreements in climate change. Systematic literature review]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 540-563.

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    More about this item

    Keywords

    Climate change; Emission trading; Competitiveness; Border tariff adjustment; CGE modeling;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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