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Carbon-motivated border tax adjustment: a proposal for the EU

Author

Listed:
  • Paola Rocchi

    (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))

  • Iñaki Arto

    (Basque Centre of Climate Change)

  • Jordi Roca

    (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))

  • Mònica Serrano

    (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))

Abstract

The analysis focuses on carbon-motivated border tax adjustment (CBTA). CBTA are tariffs applied to imports designed to avoid drawbacks of emission reduction policies when only one or few regions (the abating regions) implement them. Through CBTA the abating regions level out different treatment applied to domestic and imported products. In this paper we focus on CBTA metric. Through a multi-region and multi-sector analysis we compute and compare two possible CBTA systems that the European Union could implement to complement a hypothetical carbon tax applied to domestic products. In one system, tariffs are computed based on the emissions generated abroad to produce the goods imported by the European Union. In the second system, tariffs are based on the emissions that the European Union would have generated to produce domestically the same products. Results at country and sector level contribute to better understand the effects of this instrument and to add information to the political debate on it. Moreover, an important contribution of this analysis is that we explore methodological issues that arise from the use of multi-region and multi-sector models to compute different CBTA metrics.

Suggested Citation

  • Paola Rocchi & Iñaki Arto & Jordi Roca & Mònica Serrano, 2015. "Carbon-motivated border tax adjustment: a proposal for the EU," UB School of Economics Working Papers 2015/327, University of Barcelona School of Economics.
    • Handle: RePEc:ewp:wpaper:327web
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    References listed on IDEAS

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    More about this item

    Keywords

    Carbon-motivated border tax adjustmen; European Union; Embodied emissions; Avoided emissions; WIOD database.;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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