A Computable General Equilibrium Analysis of Border Adjustments Under the Cap-and-Trade System: A Case Study of the Japanese Economy

Takeda, Shiro; Horie, Takeshi; Arimura, Toshi H.

doi:10.1142/s2010007812500030

Cited by 14 publications

(17 citation statements)

References 3 publications

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“…The literature to date related to BTAs has mainly focused on quantifying the extent of competitiveness effects and the scope of carbon leakage under different implementation scenarios of carbon tariffs in developed countries (e.g., Böhringer et al, 2012b;Kuik and Hofkes, 2010;Mckibbin and Wilcoxen, 2009;Takeda et al, 2012). For example, using the GTAP-E model, Kuik and Hofkes (2010) explored the implications of BTAs in the EU-ETS.…”

Section: Introductionmentioning

confidence: 99%

“…They suggest that the impact of border carbon tariffs on overall import prices in the EU would be relatively small and that the border tax measures would therefore be little effective for EU importcompeting industries in general. Takeda et al (2012) evaluated the BTA policies as carbon regulations in Japan. Their results show that export border adjustments are effective for restoring the competitiveness of Japanese exporters and reducing carbon leakage.…”

Section: Introductionmentioning

confidence: 99%

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Economic and environmental impact analysis of carbon tariffs on Chinese exports

2015

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JEL classification: C68 D58 F18 Q54 Q58 Keywords: CGE Border tax adjustments Carbon leakage ChinaAs an alternative measure for the proposal of border tax adjustments (BTAs) advocated by the countries that seek to abate CO 2 emissions (hereafter referred to as 'abating countries'), export carbon tax (ECT) voluntarily conducted by the developing countries has been widely discussed in recent years. This paper uses the multi-regional and multi-commodity computable general equilibrium (CGE) model and the GTAP8.1 database to investigate the economic and environmental effects of carbon tariffs on Chinese exports. The following three policy scenarios are considered: 1) the abating countries implement cap-and-trade emission programs without BTAs; 2) the unilaterally abating countries levy import tariffs and export subsidies on non-abating countries; and, 3) the abating countries implement unilateral climate policies combined with ECT imposed by China. The ECT policy of China is evaluated with a carbon price set at 17 US$/t-CO 2 . Results illustrate that the ECT voluntarily implemented by China is ineffective in reducing its domestic CO 2 emissions. Moreover, ECT merely has a minor impact on global emissions. Finally, the competitiveness of China's energy-intensive and trade-exposed (EITE) industries suffers substantial losses if export tariffs are imposed. However, China's gains in terms of welfare and gross domestic product (GDP) would be slightly improved if an ECT policy is implemented, compared to the scenario where China is subjected to BTAs levied by the abating coalition. In the light of the tradeoff between tariff revenue for welfare and competiveness losses of the EITE industries, it is therefore difficult to conclude that carbon tariff on Chinese exports is an alternative policy to BTAs.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Economic and environmental impact analysis of carbon tariffs on Chinese exports

2015

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“…Meanwhile, for mitigating the negative impact of climate change and achieving the sustainable development, most of governments all over the world tend to implement some regulations to reduce the carbon emissions. For instance, as early as in 2005, the first emission trading system is set up by European Union [6], followed by the United States, Canada, Japan, China, and other countries subsequently [7][8][9]. They have adopted the cap-and-trade regulation to suppress the increase of carbon emissions.…”

Section: Introductionmentioning

confidence: 99%

Myopic versus Farsighted Behaviors in a Low‐Carbon Supply Chain with Reference Emission Effects

et al. 2019

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The increased carbon emissions cause relatively climate deterioration and attract more attention of governments, consumers, and enterprises to the low-carbon manufacturing. This paper considers a dynamic supply chain, which is composed of a manufacturer and a retailer, in the presence of the cap-and-trade regulation and the consumers’ reference emission effects. To investigate the manufacturer’s behavior choice and its impacts on the emission reduction and pricing strategies together with the profits of both the channel members, we develop a Stackelberg differential game model in which the manufacturer acts in both myopic and farsighted manners. By comparing the equilibrium strategies, it can be found that the farsighted manufacturer always prefers to keep a lower level of emission reduction. When the emission permit price is relatively high, the wholesale/retail price is lower if the manufacturer is myopic and hence benefits consumers. In addition, there exists a dilemma that the manufacturer is willing to act in a farsighted manner but the retailer looks forward to a partnership with the myopic manufacturer. For a relatively high price of emission permit, adopting myopic strategies results in a better performance of the whole supply chain.

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“…This is because the EITEs make significant use of (the higher cost) emission-intensive imports themselves and also because of market contraction effects in the home country. Takeda et al (2012) isolated the effects of BAMs accompanying a carbon tax policy in Japan using a multi-regional CGE model developed using the GTAP-E database. They particularly analyzed welfare decline, competitiveness loss and carbon leakage and concluded that 'no single policy is superior to the other policies' in terms of addressing simultaneously all three issues.…”

Section: Literature On Border Adjustmentsmentioning

confidence: 99%

“…Following Takeda et al (2012), we let q j CO2T to be the total amount of CO 2e generated by the jth sector. Then, we define q j CO2T to include both direct and indirect emissions.…”

Section: Carbon Tax and Border Adjustmentmentioning

confidence: 99%