Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/196153
Authors: 
Richter, Philipp M.
Runkel, Marco
Schmidt, Robert C.
Year of Publication: 
2019
Series/Report no.: 
KCG Working Paper 14
Abstract: 
The loss of international competitiveness of domestic industries remains a key obstacle to the implementation of effective carbon prices in a world without harmonized climate policies. We analyze countries' non-cooperative choices of emissions taxes under imperfect competition and mobile polluting firms. In our general equilibrium setup with trade, wage effects prevent all firms from locating in the same country. While under local or no pollution countries achieve the first-best, under transboundary pollution taxes are inefficiently low and lower than under autarky where only the "standard" free riding incentive distorts emissions taxes. This effect is more pronounced when polluting firms are mobile.
Subjects: 
FDI
Strategic Environmental Policy
Firm Location
Carbon Leakage
General Equilibrium
JEL: 
F12
F18
H23
Document Type: 
Working Paper

Files in This Item:
File
Size
844.89 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.