Reconciling Climate Change and Trade Policy

By Aaditya Mattoo, Arvind Subramanian, D. Mensbrugghe, Jianwu He. 2009

232 citations recorded by the source corpus.

There is growing clamor in industrial countries for additional border taxes on imports from countries with lower carbon prices. The authors confirm the findings of other research that unilateral emissions cuts by industrial countries will have minimal carbon leakage effects. However, output and exports of energy-intensive manufactures are projected to decline potentially creating pressure for trade action. A key factor affecting the impact of any border taxes is whether they are based on the carbon content of imports or the carbon content in domestic production. Their quantitative estimates suggest that the former action when applied to all merchandise imports would address competitiveness and environmental concerns in high income countries but with serious consequences for trading partners. For example, Chinas manufacturing exports would decline by one-fifth and those of all low and middle income countries by 8 per cent; the corresponding declines in real income would be 3.7 per cent and 2.4 per cent. Border tax adjustment based on the carbon content in domestic production, especially if applied to both imports and exports, would broadly address the competitiveness concerns of producers in high income countries and less seriously damage developing country trade.

View Paper: https://www.semanticscholar.org/paper/37d00a42898a45eafc1334c0770a281240bd4812

Citations in the corpus

Kyoto and the carbon footprint of nations (2012, unknown): “Mattoo et al. (2009) highlight how border tax adjustments could harm developing economies.”
The Strategic Value of Carbon Tariffs (2016, unknown): “emissions (Mattoo et al. 2009) to the use of the full direct and indirect emissions embodied in goods (Böhringer et al.”
Multiple carbon accounting to support just and effective climate policies (2016, unknown): “But if consumption-based policies are adopted to meet these targets, the conclusions drawn with respect to “fairness” may actually be reversed(43) as some types of such policies have been found to pass on a larger part of the abatement burden to developing and emerging economies.(44,45)”
Trade, climate change, and the political game theory of border carbon adjustments (2012, unknown): “Mattoo et al. (2009) estimate the impact BCAs could have on trade flows and welfare.”
Climate change and trade in agriculture (2011, unknown): “Recent research (Matoo et al., 2009; OECD, 2009, Winchester et al., 2010) finds that as the coalition of countries acting domestically to reduce energy intensity increases, the leakage rate falls rapidly.”
The Global Effects of Subglobal Climate Policies (2010, unknown): “Mattoo et al. (2009) also look at the effects of border carbon adjustment options implemented by a coalition of industrialized countries.”
Would Border Carbon Adjustments Prevent Carbon Leakage and Heavy Industry Competitiveness Losses? Insights From a Meta-Analysis of Recent Economic Studies (2014, unknown): “In the studies that report it (Böhringer et al., 2012c; Lanzi et al., 2012; Mattoo et al., 2009), global welfare is decreasing with BCA.”