The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)

Böhringer, Christoph; Balistreri, Edward J.; Rutherford, Thomas F.

doi:10.1016/j.eneco.2012.10.003

Cited by 280 publications

(176 citation statements)

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“…In line with previous studies (see e.g. Fischer and Fox, 2012, and the EMF study summarised by Böhringer et al, 2012a), we see that tariffs based on average regional embodied emissions reduce the leakage rates, and particularly so if they also take into account indirect emissions from electricity production. The resulting leakage rates in the RegDir and RegIndir scenarios are 16.4% and 14.5%, respectively.…”

Section: Simulation Resultssupporting

confidence: 75%

“…Only rarely are all embodied emissions accounted for (e.g., Böhringer et al, 2012b), but rather often are the emissions arising from the use of electricity accounted for (e.g. Mattoo et al 2009, Winchester 2011, Böhringer et al 2012a). …”

Section: Introductionmentioning

confidence: 99%

“…Also, the coalition's efficiency costs of its carbon policies, as well as the competitiveness losses of its emission-intensive industries, decline, while the opposite is true for non-coalition countries. See Branger and Quirion (2014), Böhringer et al (2012a), and Zhang (2012) for recent overviews. The numerical studies have increased our knowledge of the role of various factors like coalition size, the coverage of the carbon tariffs, and how embodied emissions are calculated.…”

Section: Introductionmentioning

confidence: 99%

“…the EMF 29 model cross-comparison study summarised in Böhringer et al, 2012a). However, the carbon tariff designs investigated so far are not targeted towards the individual firm or shipment, but based on the average carbon content of regions or industries.…”

Section: Introductionmentioning

confidence: 99%

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Targeted Carbon Tariffs - Carbon Leakage and Welfare Effects

et al. 2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract:Climate effects of unilateral carbon policies are undermined by carbon leakage. To counteract leakage and increase global cost-effectiveness carbon tariffs can be imposed on the emissions embodied in imports from non-regulating regions. We present a theoretical analysis on the economic incentives for emission abatement of producers subjected to carbon tariffs. We quantify the impacts of different carbon tariff designs by an empirically based multi-sector, multi-region CGE model of the global economy. We find that firm-targeted tariffs can deliver much stronger leakage reduction and higher efficiency gains than tariff designs operated at the industry level. In particular, because the exporters are able to reduce their carbon tariffs by adjusting emissions, their competitiveness and the overall welfare of their economies will be less randomly and less adversely affected than in previously studied carbon tariff regimes. This beneficial distributional impact could facilitate a higher degree of legitimacy and legality of carbon tariffs. Keywords SammendragVi analyserer hvordan ulike utforminger av et system med karbontoll kan øke effektiviteten til klimapolitikken til en gruppe av land (koalisjon). I vårt eksempel ser vi på et kvotesystem for CO 2 i EU, mens resten av verden ikke fører noen aktiv klimapolitikk. Dersom EU kombinerer CO 2 -(kvote)prising med å legge toll på importerte varer som inneholder karbon, vil det føre til mindre karbonlekkasje og dermed ha en større klimaeffekt.I prinsippet skal tollsatsene utformes slik at karboninnholdet i hver enkelt importerte vare beskattes med samme sats som CO 2 -prisen i koalisjonen, og karboninnholdet som medregnes skal inkludere alle direkte og indirekte utslippseffekter produksjonen av importvaren har forårsaket utenfor koalisjonen. I praksis er det imidlertid mange administrative, politiske og legale hindringer i veien for å få på plass et slikt optimalt system for karbontoll.Vi ser derfor på ulike praktiske utforminger av et system for karbontoll. Først utleder vi analytiske resultater i en partiell modell for to regioner -koalisjonen og resten av verden. Deretter kvantifiserer vi, ved hjelp av en numerisk global likevektsmodell (SNoW), hvordan tollsystemene påvirker karbonlekkasje, velferd og fordeling mellom koalisjonen og landene utenfor.Vi finner at karbontoll som rettes direkte mot karbonutslippene til den enkelte bedrift utenfor koalisjonen reduserer karbonlekkasje...

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Section: Simulation Resultssupporting

confidence: 75%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Targeted Carbon Tariffs - Carbon Leakage and Welfare Effects

et al. 2015

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“…The bulk of these studies investigates border carbon adjustments (e.g., Babiker and Rutherford, 2005;Mattoo et al, 2009;McKibben and Wilcoxen, 2009;Dissou and Eyland, 2011;Winchester et al, 2010; and report impacts on EITE industries in terms of change in production output. The general finding is that border carbon adjustment attenuate negative output effects for EITE industries in unilaterally regulated countries (see Böhringer et al, 2012a for a meta-analysis) while, providing only limited gains in global cost-effectiveness of unilateral action and enhancing negative terms-of-trade spillover effects to countries without emission regulation. Output-based allocation or preferential emission pricing for EITE sectors can also help to dampen adverse output effects (Fischer and Fox, 2012) significantly.…”

Section: Literature Reviewmentioning

confidence: 99%

The efficiency cost of protective measures in climate policy

et al. 2017

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Emissions embodied in global trade have plateaued due to structural changes in China

et al. 2017

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In the 2000s, the rapid growth of CO2 emitted in the production of exports from developing to developed countries, in which China accounted for the dominant share, led to concerns that climate polices had been undermined by international trade. Arguments on “carbon leakage” and “competitiveness”—which led to the refusal of the U.S. to ratify the Kyoto Protocol—put pressure on developing countries, especially China, to limit their emissions with Border Carbon Adjustments used as one threat. After strong growth in the early 2000s, emissions exported from developing to developed countries plateaued and could have even decreased since 2007. These changes were mainly due to China: In 2002–2007, China's exported emissions grew by 827 MtCO2, amounting to almost all the 892 MtCO2 total increase in emissions exported from developing to developed countries, while in 2007–2012, emissions exported from China decreased by 229 MtCO2, contributing to the total decrease of 172 MtCO2 exported from developing to developed countries. We apply Structural Decomposition Analysis to find that, in addition to the diminishing effects of the global financial crisis, the slowdown and eventual plateau was largely explained by several potentially permanent changes in China: Decline in export volume growth, improvements in CO2 intensity, and changes in production structure and the mix of exported products. We argue that growth in China's exported emissions will not return to the high levels during the 2000s, therefore the arguments for climate polices focused on embodied emissions such as Border Carbon Adjustments are now weakened. Plain Language Summary In the 2000s, CO2 emissions from production in developed countries flattened while emissions from their consumption grew. The rapid growth of exported emissions from developing countries to developed countries, with the largest contribution from China, played a significant role. This led to concerns that climate polices had been undermined by rapid growth in international trade. Since around 2007, growth in these exported emissions has plateaued, predominantly due to changes in China. Our study investigates China's changes, demonstrating that in addition to the effects of global financial crisis, China implemented potentially permanent structural changes. We argue that China's exported emissions are unlikely to return to the growth levels from the 2000s, and therefore trade‐related climate polices will be much less relevant.

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The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)

Cited by 280 publications

References 15 publications

Targeted Carbon Tariffs - Carbon Leakage and Welfare Effects

Targeted Carbon Tariffs - Carbon Leakage and Welfare Effects

The efficiency cost of protective measures in climate policy

Emissions embodied in global trade have plateaued due to structural changes in China

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