IDEAS home Printed from https://ideas.repec.org/a/spr/dyngam/v8y2018i3d10.1007_s13235-018-0261-y.html
   My bibliography  Save this article

Climate Engineering in an Interconnected World: The Role of Tariffs

Author

Listed:
  • Markus Eigruber

    (University of Vienna)

  • Franz Wirl

    (University of Vienna)

Abstract

This paper investigates strategic trade policies as a response to negative externalities linked to climate engineering. Parties negatively affected, or which only perceive damages, may react to geoengineering by deploying trade sanctions, i.e. the imposition of tariffs. By introducing a dynamic trade model, we show that geoengineering-averse countries have an incentive to implement or increase existing tariffs when the other country uses geoengineering. Our contribution is to highlight that potential consequences on trade should be taken into account before climate engineering techniques are applied. This is particularly crucial in our globalized world since a successful climate policy demands large scale if not global cooperation.

Suggested Citation

  • Markus Eigruber & Franz Wirl, 2018. "Climate Engineering in an Interconnected World: The Role of Tariffs," Dynamic Games and Applications, Springer, vol. 8(3), pages 573-587, September.
    • Handle: RePEc:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0261-y
    DOI: 10.1007/s13235-018-0261-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13235-018-0261-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13235-018-0261-y?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.

    References listed on IDEAS

    as
    1. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    2. Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
    3. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    4. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    5. Juan Moreno-Cruz & David Keith, 2013. "Climate policy under uncertainty: a case for solar geoengineering," Climatic Change, Springer, vol. 121(3), pages 431-444, December.
    6. Martin L. Weitzman, 2015. "A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(4), pages 1049-1068, October.
    7. Adam Millard-Ball, 2012. "The Tuvalu Syndrome," Climatic Change, Springer, vol. 110(3), pages 1047-1066, February.
    8. Daniel Heyen & Thilo Wiertz & Peter Irvine, 2015. "Regional disparities in SRM impacts: the challenge of diverging preferences," Climatic Change, Springer, vol. 133(4), pages 557-563, December.
    9. Wirl, Franz, 2014. "Taxes versus permits as incentive for the intertemporal supply of a clean technology by a monopoly," Resource and Energy Economics, Elsevier, vol. 36(1), pages 248-269.
    10. Johannes Urpelainen, 2012. "Geoengineering and global warming: a strategic perspective," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(4), pages 375-389, November.
    11. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, September.
    12. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    13. David G. Victor, 2008. "On the regulation of geoengineering," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(2), pages 322-336, Summer.
    14. William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
    15. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, September.
    16. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Zhi-Hua Hu & Shu-Wen Wang, 2022. "An Evolutionary Game Model Between Governments and Manufacturers Considering Carbon Taxes, Subsidies, and Consumers’ Low-Carbon Preference," Dynamic Games and Applications, Springer, vol. 12(2), pages 513-551, June.
    2. Irina Bakalova & Mariia Belaia, 2023. "Stability of Efficient International Agreements on Solar Geoengineering," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(3), pages 673-712, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heyen, Daniel & Horton, Joshua & Moreno-Cruz, Juan, 2019. "Strategic implications of counter-geoengineering: Clash or cooperation?," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 153-177.
    2. Todd Sandler, 2018. "Collective action and geoengineering," The Review of International Organizations, Springer, vol. 13(1), pages 105-125, March.
    3. Richard S.J. Tol, 2021. "Estimates of the social cost of carbon have not changed over time," Working Paper Series 0821, Department of Economics, University of Sussex Business School.
    4. Adrien Fabre & Gernot Wagner, 2020. "Availability of risky geoengineering can make an ambitious climate mitigation agreement more likely," Post-Print halshs-04363061, HAL.
    5. repec:spo:wpmain:info:hdl:2441/14g286e42n8bl9is6h16b18kes is not listed on IDEAS
    6. Richard S. J. Tol, 2021. "Selfish Bureaucrats And Policy Heterogeneity In Nordhaus’ Dice," World Scientific Book Chapters, in: Robert Mendelsohn (ed.), CLIMATE CHANGE ECONOMICS Commemoration of Nobel Prize for William Nordhaus, chapter 6, pages 77-92, World Scientific Publishing Co. Pte. Ltd..
    7. Wirl, Franz & Dockner, Engelbert, 1995. "Leviathan governments and carbon taxes: Costs and potential benefits," European Economic Review, Elsevier, vol. 39(6), pages 1215-1236, June.
    8. Michael Finus & Francesco Furini, 2022. "Global Climate Governance in the Light of Geoengineering: A Shot in the Dark?," Graz Economics Papers 2022-02, University of Graz, Department of Economics.
    9. Fujii, Tomoki & Karp, Larry, 2008. "Numerical analysis of non-constant pure rate of time preference: A model of climate policy," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 83-101, July.
    10. Joseph E. Aldy & Alan J. Krupnick & Richard G. Newell & Ian W. H. Parry & William A. Pizer, 2010. "Designing Climate Mitigation Policy," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 903-934, December.
    11. Lamperti, Francesco & Napoletano, Mauro & Roventini, Andrea, 2020. "Green Transitions And The Prevention Of Environmental Disasters: Market-Based Vs. Command-And-Control Policies," Macroeconomic Dynamics, Cambridge University Press, vol. 24(7), pages 1861-1880, October.
    12. Richard S. J. Tol, 2021. "Estimates of the social cost of carbon have increased over time," Papers 2105.03656, arXiv.org, revised Aug 2022.
    13. Larry S. Karp, 2012. "Provision of a Public Good with Altruistic Overlapping Generations and Many Tribes," CESifo Working Paper Series 3895, CESifo.
    14. Johannes Emmerling & Massimo Tavoni, 2017. "Quantifying Non-cooperative Climate Engineering," Working Papers 2017.58, Fondazione Eni Enrico Mattei.
    15. Adrien Fabre & Gernot Wagner, 2020. "Availability of risky geoengineering can make an ambitious climate mitigation agreement more likely," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-4, December.
    16. repec:hal:spmain:info:hdl:2441/14g286e42n8bl9is6h16b18kes is not listed on IDEAS
    17. Stefano Giglio & Bryan Kelly & Johannes Stroebel, 2021. "Climate Finance," Annual Review of Financial Economics, Annual Reviews, vol. 13(1), pages 15-36, November.
    18. Javier Frutos & Guiomar Martín-Herrán, 2018. "Selection of a Markov Perfect Nash Equilibrium in a Class of Differential Games," Dynamic Games and Applications, Springer, vol. 8(3), pages 620-636, September.
    19. Holger Strulik, 2021. "Hyperbolic discounting and the time‐consistent solution of three canonical environmental problems," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 462-486, June.
    20. Mason, Charles F. & Polasky, Stephen & Tarui, Nori, 2017. "Cooperation on climate-change mitigation," European Economic Review, Elsevier, vol. 99(C), pages 43-55.
    21. Bård Harstad, 2016. "The Dynamics Of Climate Agreements," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 719-752, June.
    22. Timo Goeschl & Daniel Heyen & Juan Moreno-Cruz, 2013. "The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(1), pages 85-104, September.

    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:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0261-y. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.