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Global Welfare Implications of Carbon Border Taxes. CEPS Working Document No. 315, 6 July 2009

Gros, Daniel. (2009) Global Welfare Implications of Carbon Border Taxes. CEPS Working Document No. 315, 6 July 2009. [Working Paper]

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    Abstract

    This paper presents a simple, basic model to compute the welfare consequences of the introduction of a tariff on the CO2 content of imported goods in a country that already imposes a domestic carbon tax. The main finding is that the introduction of a carbon import tariff increases global welfare (and not just the welfare of the importing country) if there is no (or insufficient) pricing of carbon abroad. A higher domestic price of carbon justifies a higher import tariff. Moreover, a higher relative intensity of carbon abroad increases the desirability of high import tariff imposed by the home country because a border tax shifts production to the importing country, which in this case leads to lower environmental costs.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > tax policy
    EU policies and themes > Policies & related activities > environmental policy (including international arena)
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 27 Jul 2009
    Page Range: p. 19
    Last Modified: 15 Feb 2011 18:13
    URI: http://aei.pitt.edu/id/eprint/11333

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