Border carbon adjustments with endogenous assembly locations

Cheng, Haitao

doi:10.1016/j.econmod.2021.105666

Cited by 4 publications

(4 citation statements)

References 24 publications

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“…However, the degree of welfare change depends on the domestic carbon tax of the importing country, whether the exporting country imposes a domestic carbon tax, and the domestic carbon intensity of the importing and exporting country. Cheng (2021) established a two-country model with several intermediate product producers and one final product producer. The study claimed that border carbon adjustment could reduce the import of polluting inputs to some extent, avoid carbon leakage, and further reduce global emissions.…”

Section: Literature Reviewmentioning

confidence: 99%

Border Carbon Adjustment and China’s Optimal Environmental Tax: A Theoretical Analysis Based on Oligopoly Competition Model

Xiang,

Wang,

Kuang

2023

TEL

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A two-stage game model was established against the backdrop of border carbon adjustment imposed by foreign countries, with a focus on exploring the impact of border carbon adjustment imposed by foreign countries on the output and profits of domestic export enterprises. Besides, the decision on the optimal environmental tax in China under border carbon adjustments was further discussed. This article argues that the imposition of border carbon adjustment by foreign countries will reduce the balanced export volume and export profits of domestic export enterprises, while also increasing the profits of foreign enterprises; the decision on the optimal domestic environmental tax depends on the tax rate of border carbon adjustment imposed by foreign countries. The higher the border carbon adjustment rate imposed by foreign countries on our country, the higher the optimal domestic environmental tax rate in China. The lower the border carbon adjustment rate imposed by foreign countries on our country, the lower the optimal domestic environmental tax rate in China. Based on these conclusions, relevant policy recommendations were proposed.

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Section: Literature Reviewmentioning

confidence: 99%

Border Carbon Adjustment and China’s Optimal Environmental Tax: A Theoretical Analysis Based on Oligopoly Competition Model

Xiang,

Wang,

Kuang

2023

TEL

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“…A study by Arellano (2020) analyzes the influence of investments in the context of economic crises and finds that well-targeted investments can be instrumental in recovery and stabilization efforts. The dynamics of investments in the healthcare sector and their effects on overall economic output are explored in a study by Cheng (2018), which highlights the importance of healthcare investments for economic well-being.…”

Section: Literature Reviewmentioning

confidence: 99%

Navigating the Intricate Relationship between Investments and Global Output: A Leontief Matrix Case Study of Romania

Busu,

Vargas,

Anagnoste

2023

JRFM

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This research delves into the intricate dynamics underlying the impact of investments on global output, employing the Leontief matrix as a robust analytical framework. Investments wield a profound influence on economies worldwide, with varying effects contingent upon investment types, development levels of countries, and external factors such as trade conflicts and global shocks. The diverse range of investment forms, including physical capital, human capital, R&D, and technological investments, engenders distinct implications for productivity, innovation, and efficiency. Developing and developed economies navigate unique trajectories, with investments playing a pivotal role in bridging infrastructure gaps, improving technology, and spurring growth. However, external disruptions, such as trade wars and global shocks, introduce an element of complexity, reshaping investment patterns and altering global output trajectories. This study centers on harnessing the Leontief matrix’s prowess to evaluate the interplay of investments and global output, focusing on the Romanian economy. By analyzing input–output tables, encompassing 105 branches aggregated into 10 sectors, the research captures the intricate connections between economic segments. Notably, the Romanian context reveals the volatility of the matrix coefficients, an outcome of ongoing transitional processes, technological advancements, and fluctuating relative prices. In unraveling the intricate threads weaving investments and global output, this study contributes to a nuanced comprehension of these multifaceted interactions. The findings underscore the significance of tailoring investment strategies to specific economic contexts and advocate for robust frameworks, such as the input–output model, to inform policy decisions and drive sustainable growth in an increasingly complex global economy.

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“…The main reasons for the EU to promote the CBAM is to prevent "carbon leakage". This is to prevent local EU companies from migrating to avoid strict carbon emission reduction policies, thereby creating a level playing field and exploring a path to a global carbon price [2]. Indeed, the emissions embedded in the goods and services imported to the EU have been increasing and currently represent 20 percent of the EU's domestic CO 2 emissions [3].…”

Section: Introductionmentioning

confidence: 99%

Evolutionary Game Analysis of Responding to the EU’s Carbon Border Adjustment Mechanism

2022

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The European Union (EU) views the carbon border adjustment mechanism (CBAM) as a measure to tackle carbon leakage, which will have a profound impact on non-EU countries’ exports. Policymakers are faced with the question of how to deal with the CBAM. In contrast to previous studies, we explore the effects of the CBAM on non-EU countries from a dynamic game perspective. This study analyzed the potential effects of the CBAM on China and found that the government and export companies are the two main stakeholders. We found that they can both choose whether to respond actively or passively. Based on their interactive relationship, we adopted an evolutionary game to model the nexus between the government and export companies. We analyzed the evolutionary stable state of each stakeholder and the whole game with the replicator dynamic equation system. To make the system evolve to the optimal state where the government reacts actively and export companies implement low-carbon production, we provide a policy mechanism for how to set key parameters’ values. We used numerical simulation to verify the policy design and to conduct sensitivity analyses of the key parameters. Our results show that, when two stakeholders positively react to the CBAM, it is necessary to increase their profits and to reduce their costs. Therefore, some suggestions are proposed, including optimizing the trade structure, strengthening cooperation with the EU, improving the current carbon market, and adopting carbon tax.

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Border carbon adjustments with endogenous assembly locations

Cited by 4 publications

References 24 publications

Border Carbon Adjustment and China’s Optimal Environmental Tax: A Theoretical Analysis Based on Oligopoly Competition Model

Border Carbon Adjustment and China’s Optimal Environmental Tax: A Theoretical Analysis Based on Oligopoly Competition Model

Navigating the Intricate Relationship between Investments and Global Output: A Leontief Matrix Case Study of Romania

Evolutionary Game Analysis of Responding to the EU’s Carbon Border Adjustment Mechanism

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