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How Large Are The Impacts Of Carbon Motivated Border Tax Adjustments?

Author

Listed:
  • YAN DONG

    (Institute of World Economics and Politics, Chinese Academy of Social Sciences, 100732, 15th Floor of CASS Building, No. 5 Jianguomen Nei Avenue, Beijing, China)

  • JOHN WALLEY

    (Department of Economics, Social Science Centre, University of Western Ontario, London, Ontario, N6A 5C2, Canada)

Abstract

This paper discusses the size of impact of carbon motivated border tax adjustments on world trade and welfare. We report numerical simulation results which suggest that impacts on welfare, trade, and emissions will likely be small. This is because proposed measures use carbon emissions in the importing country in producing goods similar to imports rather than carbon content in calculating the size of barriers. Moreover, because border adjustments involve both tariffs and export rebates, it is the differences in emissions intensity across sector rather than emissions level which matters. Where there is no difference in emissions intensities across sectors, Lerner symmetry holds for the border adjustment and no relative effects occur.

Suggested Citation

  • Yan Dong & John Walley, 2012. "How Large Are The Impacts Of Carbon Motivated Border Tax Adjustments?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-28.
    • Handle: RePEc:wsi:ccexxx:v:03:y:2012:i:01:n:s2010007812500017
    DOI: 10.1142/S2010007812500017
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    More about this item

    Keywords

    Border tax adjustments; carbon emissions; carbon tariffs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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