Arbeitspapier

Optimal Emission Pricing in the Presence of International Spillovers: Decomposing Leakage and Terms-of-Trade Motives

Carbon leakage provides an efficiency argument for unilateral climate policy to differentiate emission prices in favor of emission-intensive and trade-exposed sectors. At the same time, differential emission pricing can be (mis-)used as a beggar-thy-neighbor policy to exploit terms of trade. Using an optimal tax framework, we propose a method to decompose the leakage motive and the terms-of-trade motive for emission price differentiation. We employ our method for a quantitative impact assessment of unilateral climate policy based on empirical data. We find that the leakage motive yields only small efficiency gains compared to uniform emission pricing. Likewise, the terms-of-trade motive has rather limited potential for strategic burden shifting. We conclude that the simple first-best rule of uniform emission pricing remains a practical guideline for unilateral climate policy design.

Sprache
Englisch

Erschienen in
Series: Oldenburg Discussion Papers in Economics ; No. V-347-12

Klassifikation
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Energy and the Macroeconomy
General Equilibrium and Welfare Economic Analysis of Regional Economies
Computable and Other Applied General Equilibrium Models
Thema
optimal taxation
emission leakage
terms of trade
Umweltschutz
Internationale Umweltpolitik
Umweltbelastung
Treibhausgas-Emissionen
Luftverschmutzung
Emissionshandel
Preisdifferenzierung
Terms of Trade
USA
EU-Staaten

Ereignis
Geistige Schöpfung
(wer)
Böhringer, Christoph
Lange, Andreas
Rutherford, Thomas F.
Ereignis
Veröffentlichung
(wer)
University of Oldenburg, Department of Economics
(wo)
Oldenburg
(wann)
2012

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
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Objekttyp

  • Arbeitspapier

Beteiligte

  • Böhringer, Christoph
  • Lange, Andreas
  • Rutherford, Thomas F.
  • University of Oldenburg, Department of Economics

Entstanden

  • 2012

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