Carbon tax polices in a country are often criticized as leading to production shifting to other unregulated countries (”carbon leak”). We analyze here the different impact on leakages and trade of a carbon tax and of an emission permit policy enacted by one country (the ”home” country) in a two country model of price competition with differenti- ated products. A lower carbon leak, a reduction in global emissions, and an im- provement in traded volumes can be achieved by means of an emission standards, whereas a carbon tax improves the traded values; govern- ments may have to face a trade-off↵ between leakages and trade balance.

Carbon tax, emission permits, and carbon leak under price competition / P. Garella, M.T. TRENTINAGLIA DE DAVERIO. - [s.l] : Dipartimento di Economia, Management e Metodi Quantitativi; Università di Milano, 2015 May.

Carbon tax, emission permits, and carbon leak under price competition

P. Garella;M.T. TRENTINAGLIA DE DAVERIO
2015

Abstract

Carbon tax polices in a country are often criticized as leading to production shifting to other unregulated countries (”carbon leak”). We analyze here the different impact on leakages and trade of a carbon tax and of an emission permit policy enacted by one country (the ”home” country) in a two country model of price competition with differenti- ated products. A lower carbon leak, a reduction in global emissions, and an im- provement in traded volumes can be achieved by means of an emission standards, whereas a carbon tax improves the traded values; govern- ments may have to face a trade-off↵ between leakages and trade balance.
mag-2015
carbon leakage; carbon tax; emission permits; trade balance; price competition
Settore SECS-P/01 - Economia Politica
https://ideas.repec.org/cgi-bin/htsearch?q=garella&ul=mil%2Fwpdepa
Working Paper
Carbon tax, emission permits, and carbon leak under price competition / P. Garella, M.T. TRENTINAGLIA DE DAVERIO. - [s.l] : Dipartimento di Economia, Management e Metodi Quantitativi; Università di Milano, 2015 May.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/533836
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