Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105032
Authors: 
Böhringer, Christoph
Carbone, Jared C.
Rutherford, Thomas F.
Year of Publication: 
2012
Series/Report no.: 
Oldenburg Discussion Papers in Economics V-346-12
Abstract: 
The cost-effectiveness of unilateral emission abatement can be seriously hampered by emission leakage. We assess three widely-discussed proposals for leakage reduction targeted at energy-intensive and trade-exposed industries: border tax adjustments, output-based allocation and industry exemptions. We find that none of these measures amounts to a “magic bullet” when both efficiency and equity criteria matter. Border tax adjustments reduce leakage and provide global cost savings but exacerbate regional inequality. Exemptions produce very little leakage reduction and run the risk of increasing efficiency cost of climate policy. Output-based allocation does no harm but also does relatively little good by our outcome measures.
Subjects: 
Unilateral Climate Policy
Leakage
Efficiency
Equity
Document Type: 
Working Paper

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