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Implementing Carbon Tariffs: A Fool's Errand?

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  • Michael Owen Moore

    (Department of Economics/Institute for International Economic Policy, George Washington University)

Abstract

Some governments are considering taxes on imports based on carbon content from countries that have not introduced climate change policies. Such carbon border taxes appeal to domestic industries facing higher charges for their own carbon emissions. This research demonstrates that there are enormous practical difficulties surrounding such plans. Various policies are evaluated according to World Trade Organization compliance, administrative plausibility, help in meeting environmental goals, and ability to deal with domestic pressures. The steel industry is used as a case study in this analysis. All considered policies arguably fail to meet at least one of these constraints, bringing into question the plausibility that a carbon border tax can be practical policy.

Suggested Citation

  • Michael Owen Moore, 2010. "Implementing Carbon Tariffs: A Fool's Errand?," Working Papers 2010-02, The George Washington University, Institute for International Economic Policy.
    • Handle: RePEc:gwi:wpaper:2010-02
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    Cited by:

    1. Nicole A. MATHYS & Jaime DE MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    2. Messerlin, Patrick A., 2010. "Climate change and trade policy : from mutual destruction to mutual support," Policy Research Working Paper Series 5378, The World Bank.
    3. Springmann, Marco, 2012. "A look inwards: Carbon tariffs versus internal improvements in emissions-trading systems," Energy Economics, Elsevier, vol. 34(S2), pages 228-239.
    4. Ian Parry, 2013. "Fiscal instruments for climate finance," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 16, pages 377-402, Edward Elgar Publishing.
    5. Hübler, Michael, 2012. "Carbon tariffs on Chinese exports: Emissions reduction, threat, or farce?," Energy Policy, Elsevier, vol. 50(C), pages 315-327.
    6. Alessandro Antimiani & Valeria Costantini & Chiara Martini & Luca Salvatici, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Departmental Working Papers of Economics - University 'Roma Tre' 0136, Department of Economics - University Roma Tre.
    7. repec:hal:spmain:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    8. repec:spo:wpmain:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    9. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    10. Jaime de Melo, 2012. "Trade in a 'Green Growth' Development Strategy Global Scale Issues and Challenges," Working Papers 2012.47, Fondazione Eni Enrico Mattei.
    11. Nicole A. MATHYS & Jaime DE MELO, 2011. "The Political Economy of Climate Change Policies: Political Economy Aspects of Climate Change Mitigation Efforts," Working Papers P24, FERDI.
    12. Keen, Michael & Kotsogiannis, Christos, 2014. "Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments," Journal of International Economics, Elsevier, vol. 94(1), pages 119-128.
    13. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    14. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    15. Patrick MESSERLIN, 2011. "Climate, trade and water: A “grand coalition”?," Working Papers P23, FERDI.
    16. Antimiani, Alessandro & Costantini, Valeria & Martini, Chiara & Salvatici, Luca & Tommasino, Maria Cristina, 2013. "Assessing alternative solutions to carbon leakage," Energy Economics, Elsevier, vol. 36(C), pages 299-311.
    17. repec:spo:wpecon:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    18. Steffen, Nico, 2016. "Optimal Tariffs and Firm Technology Choice: An Environmental Approach," VfS Annual Conference 2016 (Augsburg): Demographic Change 145861, Verein für Socialpolitik / German Economic Association.
    19. Patrick Messerlin, 2012. "Climate and trade policies: from mutual destruction to mutual support," Post-Print hal-01024537, HAL.
    20. Patrick Messerlin, 2010. "Climate change and trade policy: From mutual destruction to mutual support," Working Papers hal-00972994, HAL.
    21. repec:hal:wpspec:info:hdl:2441/faqom67ai2qsojk9j15c04u8j is not listed on IDEAS
    22. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    23. Patrick MESSERLIN, 2011. "Climate, trade and water: A “grand coalition”?," Working Papers P23, FERDI.

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    More about this item

    Keywords

    carbon tariffs; climate change; environmental policy;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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