IDEAS home Printed from https://ideas.repec.org/p/gwi/wpaper/2010-02.html
   My bibliography  Save this paper

Implementing Carbon Tariffs: A Fool's Errand?

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Moore_IIEPWP2010-2.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aaditya Mattoo & Arvind Subramanian & Dominique van der Mensbrugghe & Jianwu He, 2009. "Reconciling Climate Change and Trade Policy," Working Papers 189, Center for Global Development.
    2. Michael O. Moore & Maurizio Zanardi, 2009. "Does antidumping use contribute to trade liberalization in developing countries?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(2), pages 469-495, May.
    3. Messerlin, Patrick A., 2010. "Climate change and trade policy : from mutual destruction to mutual support," Policy Research Working Paper Series 5378, The World Bank.
    4. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    5. Thomas J. Prusa, 2021. "On the spread and impact of anti-dumping," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 4, pages 45-65, World Scientific Publishing Co. Pte. Ltd..
    6. Gary Clyde Hufbauer & Steve Charnovitz & Jisun Kim, 2009. "Global Warming and the World Trading System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4280, April.
    7. Bown, Chad P., 2005. "Global antidumping database version 1.0," Policy Research Working Paper Series 3737, The World Bank.
    8. Michael Friis Jensen, 2009. "Leveling or Mining the Playing Field? Implementation Problems of Carbon-Motivated Border Adjustment Taxes," World Bank Publications - Reports 11101, The World Bank Group.
    9. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    10. Michael Moore & Alan Fox, 2010. "Why don’t foreign firms cooperate in US antidumping investigations? An empirical analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(4), pages 597-613, January.
    11. Patrick Messerlin, 2010. "Climate change and trade policy: From mutual destruction to mutual support," Working Papers hal-00972994, HAL.
    12. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
    13. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h2q83h42k is not listed on IDEAS
    14. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Michael O. Moore, 1996. "The Rise and Fall of Big Steel's Influence on U.S. Trade Policy," NBER Chapters, in: The Political Economy of Trade Protection, pages 15-34, National Bureau of Economic Research, Inc.
    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. 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 P48, FERDI.
    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.

    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. Antimiani, Alessandro & Costantini, Valeria & Martini, Chiara & Salvatici, Luca & Tommasino, Maria Cristina, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Conference papers 332096, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. 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.
    3. Jaime de Melo & Nicole A. Mathys, 2012. "Concilier les politiques commerciales et les politiques climatiques," Revue d’économie du développement, De Boeck Université, vol. 20(2), pages 57-81.
    4. Rahel Aichele, 2013. "Trade, Climate Policy and Carbon Leakage - Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 49.
    5. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications - Books, The World Bank Group, number 2283.
    6. 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.
    7. Nicole A. MATHYS & Jaime DE MELO, 2010. "Trade and Climate Change: The Challenges Ahead," Working Papers P14, FERDI.
    8. Christoph Böhringer & Knut Einar Rosendahl & Halvor Storrøsten, 2021. "Smart hedging against carbon leakage [An overview of the GTAP 9 data base]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(107), pages 439-484.
    9. Jaime de Melo, 2015. "Trade in a ‘Green Growth’ Development Strategy: Issues and Challenges," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 22, pages 553-580, World Scientific Publishing Co. Pte. Ltd..
    10. Christoph Böhringer & Thomas F. Rutherford, 2017. "Paris after Trump: An Inconvenient Insight," CESifo Working Paper Series 6531, CESifo.
    11. de Melo, Jaime & Mathys, Nicole Andréa, 2012. "Reconciling Trade and Climate Policies," CEPR Discussion Papers 8760, C.E.P.R. Discussion Papers.
    12. Michael Jakob & Jan Christoph Steckel & Ottmar Edenhofer, 2014. "Consumption- Versus Production-Based Emission Policies," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 297-318, October.
    13. Böhringer, Christoph & Bye, Brita & Fæhn, Taran & Rosendahl, Knut Einar, 2012. "Alternative designs for tariffs on embodied carbon: A global cost-effectiveness analysis," Energy Economics, Elsevier, vol. 34(S2), pages 143-153.
    14. Branger, Frédéric & Quirion, Philippe, 2014. "Would border carbon adjustments prevent carbon leakage and heavy industry competitiveness losses? Insights from a meta-analysis of recent economic studies," Ecological Economics, Elsevier, vol. 99(C), pages 29-39.
    15. Böhringer, Christoph & Rosendahl, Knut Einar & Storrøsten, Halvor Briseid, 2017. "Robust policies to mitigate carbon leakage," Journal of Public Economics, Elsevier, vol. 149(C), pages 35-46.
    16. Boehringer Christoph & Fischer Carolyn & Rosendahl Knut Einar, 2010. "The Global Effects of Subglobal Climate Policies," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(2), pages 1-35, December.
    17. Henrik Horn & Petros C. Mavroidis, 2011. "To B(TA) or Not to B(TA)? On the Legality and Desirability of Border Tax Adjustments from a Trade Perspective," The World Economy, Wiley Blackwell, vol. 34(11), pages 1911-1937, November.
    18. Feinberg Robert M., 2011. "Antidumping as a Development Issue," Global Economy Journal, De Gruyter, vol. 11(3), pages 1-17, September.
    19. Winchester Niven & Paltsev Sergey & Reilly John M, 2011. "Will Border Carbon Adjustments Work?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, January.
    20. Patrick MESSERLIN, 2011. "Climate, trade and water: A “grand coalition”?," Working Papers P23, FERDI.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:gwi:wpaper:2010-02. 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: Kyle Renner (email available below). General contact details of provider: https://edirc.repec.org/data/iigwuus.html .

    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.