Kiel Working Papers, Kiel Institute for World Economics
No 1565:
Can Carbon Based Import Tariffs Effectively Reduce Carbon Emissions?
Michael Hübler
Abstract: We estimate CO2 implicitly contained in traded commodities
based on the GTAP 7 data: While net carbon imports into the industrialized
countries amount to 15% of their total emissions, net carbon exports of the
developing countries amount to 12% of their total emissions, and net carbon
exports of China amount to 24% of China's total emissions. We also analyze
policies under a global per capita emissions based contraction and
convergence regime with emission trading: When China joins the regime, the
developing countries will benefit, while the industrialized countries will
be almost unaffected. When China does not join the regime and instead a
carbon content based border tax is imposed, the industrialized countries
will significantly benefit, while China will be significantly worse off.
The effect of the border tax adjustment on the global carbon price and on
global emissions seems negligible
Keywords: carbon content of trade, border tax adjustment, climate policy, contraction and convergence, China; (follow links to similar papers)
JEL-Codes: F13,; F18,; Q54; (follow links to similar papers)
26 pages, October 2009
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