Arbeitspapier
On the effects of unilateral environmental policy on offshoring in multi-stage production processes
In the last decades supply chains emerged that stretch across many countries. This has been explained with decreasing trade and communication costs. We extend the literature by analyzing if and how unilateral environmental regulation induces offshoring to unregulated jurisdictions. We first apply an analytical partial-equilibrium model of a two-stage production process that can be distributed between two countries and investigate unilateral emission pricing and its supplementation with border carbon taxes. To get a more comprehensive picture, we subsequently apply a computable general equilibrium model that includes a better representation of international supply chains. We find heterogeneous, but mostly positive effects of a unilateral carbon emission reduction by the European Union on the degree of vertical specialisation of European industries and explain these differences by heterogeneity in the emission-intensity and pre-policy vertical specialisation of sectors. Border taxes are successful in protecting upstream industries, but with negative side effects for downstream industries.
- Language
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Englisch
- Bibliographic citation
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Series: CAWM Discussion Paper ; No. 77
- Classification
-
Wirtschaft
Computable General Equilibrium Models
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Trade and Environment
Environmental Economics: Government Policy
- Subject
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Unilateral Climate Policy
Border Carbon Taxes
Vertical Specialisation
Offshoring
Outsourcing
Computable General Equilibrium
- Event
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Geistige Schöpfung
- (who)
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Schenker, Oliver
Koesler, Simon
Löschel, Andreas
- Event
-
Veröffentlichung
- (who)
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Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
- (where)
-
Münster
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Schenker, Oliver
- Koesler, Simon
- Löschel, Andreas
- Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
Time of origin
- 2014
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