Arbeitspapier

Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments

This paper explores the role of trade instruments in globally efficient climate policies, focusing on the central issue of whether border tax adjustment (BTA) is warranted when carbon prices differ internationally. It shows that tariff policy has a role in easing crosscountry distributional concerns that can make non-uniform carbon pricing efficient, and that Pareto-efficiency requires a form of BTA when carbon taxes in some countries are constrained, a special case being identified in which this has the simple structure envisaged in practical policy discussion. It also stresses - a point that has been overlooked in the policy debate - that the case for BTA depends critically on whether climate policies are pursued by carbon taxation or by cap-and-trade.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 3494

Classification
Wirtschaft
Taxation, Subsidies, and Revenue: General
Trade and Environment
Subject
environmental taxation
cap-and-trade
international trade
Pareto efficiency
border tax adjustments

Event
Geistige Schöpfung
(who)
Keen, Michael
Kotsogiannis, Christos
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2011

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Keen, Michael
  • Kotsogiannis, Christos
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2011

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