Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/148223 
Year of Publication: 
2016
Series/Report no.: 
Oldenburg Discussion Papers in Economics No. V-388-16
Publisher: 
University of Oldenburg, Department of Economics, Oldenburg
Abstract: 
Carbon-based import tariffs are discussed as policy measures to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We assess how the potential of carbon tariffs to increase cost-effectiveness of unilateral climate policy depends on the magnitude and composition of carbon embodied in trade. For our assessment, we combine multi-region input-output (MRIO) analysis with computable general equilibrium (CGE) analysis based on data from the World Input-Output Database (WIOD) for the period 1995 to 2007. The MRIO analysis confirms that carbon embodied in trade has sharply increased during this period. Yet, the CGE analysis suggests that the effectiveness of carbon tariffs in reducing leakage and improving global-cost effectiveness of unilateral climate policy does not increase over time, whereas the potential to shift the economic burden of CO2 emissions reduction from abating developed regions to non-abating developing regions increases substantially.
Subjects: 
carbon tariffs
unilateral climate policy
computable general equilibrium
JEL: 
Q58
D57
D58
Document Type: 
Working Paper

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