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Carbon Tariffs : An Analysis of the Trade, Welfare and Emission Effects

Title data

Larch, Mario ; Wanner, Joschka:
Carbon Tariffs : An Analysis of the Trade, Welfare and Emission Effects.
In: Journal of International Economics. Vol. 109 (November 2017) . - pp. 195-213.
ISSN 0022-1996
DOI: https://doi.org/10.1016/j.jinteco.2017.09.003

Abstract in another language

Carbon tariffs are one prominently discussed climate policy. The proponents stress the carbon tariffs’ ability to restore competitiveness, avoid carbon leakage, and reduce world carbon emissions. We analyze the effects of carbon tariffs on trade, welfare, and carbon emissions in a structural gravity model. We find that the introduction of carbon tariffs reduces welfare in most countries and the effect tends to be most pronounced in developing countries. Further, carbon emissions are massively shifted from these countries to industrialized countries and world carbon emissions decrease by 0.83 percent, with a bootstrapped 95% confidence interval of [-0.92, -0.80]. In our two-sector, two-factor gravity model, we are able to decompose the emission changes into scale, composition, and technique effects. While for individual countries composition accounts for 73 percent of the change on average, two thirds of the world reduction are due to the world scale effect.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: carbon tariffs; climate policy; gravity model
Subject classification: JEL Klassifikation:
[F140] Empirical Studies of Trade
[F180] Trade and Environment
[Q560] Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

Zusätzliche CESifo Kategorie:
[10] Energy and Climate Economics
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences
300 Social sciences > 330 Economics
Date Deposited: 16 Nov 2017 07:26
Last Modified: 13 Mar 2019 09:59
URI: https://eref.uni-bayreuth.de/id/eprint/40405