Climate policy and the problem of competitiveness : border tax adjustments or integrated emission trading?
Victoria Alexeeva-Talebi, Andreas Löschel and Tim Mennel
In the absence of an international agreement on climate policy, unilateral carbon abatement creates two problems: It tends to have a detrimental effect on domestic competitiveness, and it leads to an increase in carbon emissions abroad (leakage). This paper analyses two policies that have recently been proposed to mitigate these problems: Border tax adjustments (BTA) and integrated emission trading (IET). The former policy levies a quantity-based, the latter an emission based duty on imports from non-abating countries. In a stylised two-country model we demonstrate that the policies address both problems. However, BTA protects domestic competitiveness more effectively, while IET achieves a greater reduction in foreign emissions. A computational general equilibrium analysis of the unilateral abatement policy adopted by the European Union confirms our theoretical insights for the sectors covered by the offsetting measures. However, the implications for the competitiveness of noncovered sectors are negative. These two effects constitute the central trade-off in the implementation of both policies.
Year of publication: |
02 Sept. 2008
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Other Persons: | Alexeeva-Talebi, Victoria (contributor) ; Löschel, Andreas (contributor) ; Mennel, Tim (contributor) |
Publisher: |
Mannheim : ZEW Zentrum für Europäische Wirtschaftsforschung |
Subject: | Klimaschutz | Climate protection | Internationaler Wettbewerb | International competition | Internationales Umweltrecht | International environmental law | Zoll | Tariffs | Emissionshandel | Emissions trading | Internationale Wirtschaft | International economy | Zwei-Länder-Modell | Two-country model | Allgemeines Gleichgewicht | General equilibrium | Theorie | Theory | Welt | World | EU-Staaten | EU countries | Umweltzertifikathandel | Europäische Union |
Saved in:
freely available
Extent: | Online-Ressource (28 S.) graph. Darst. |
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Series: | ZEW discussion papers. - Mannheim : ZEW, ZDB-ID 2125128-9. - Vol. 08-061 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature |
Language: | English |
Notes: | Zsfassungen in dt. und engl. Sprache Systemvoraussetzungen: Acrobat Reader |
Other identifiers: | hdl:10419/24757 [Handle] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10003751284