Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192366 
Year of Publication: 
2004
Series/Report no.: 
Discussion Papers No. 384
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
According to the Environmental Kuznets Curve (EKC) literature, several mechanisms within rich economies, including increased willingness to conduct abatement policies, contribute to reduce environmental problems. Unilateral environmental policies in open economies may affect other countries negatively through trade inter-linkages. A relocation of dirty production and environmental pressure to economies with laxer abatement regimes can be one of many explanations to the apparent EKCs for rich countries. Further, the economic costs of national abatement policies may to some extent be shared with foreigners, both through lower demand for imports and through market share losses for foreign competitors producing cleaner products. In this paper, we quantify the effects of endogenous carbon tax policy in a rich and open economy, Norway, by means of a CGE model. We find that the environmental benefits fall and the economic costs rise when a global rather than a national perspective is employed.
Subjects: 
Climate policy
Dynamic CGE Model
Endogenous Policy
Environmental Kuznets Curve
Pollution leakage
JEL: 
D58
O11
Q25
Q28
Q48
Document Type: 
Working Paper

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