Carbon pricing, border adjustment and climate clubs: Options for international cooperation

• 成果类型: Article
• 署名作者: Ernst, Anne; Hinterlang, Natascha; Mahle, Alexander; Staehler, Nikolai
• 署名单位: Deutsche Bundesbank
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103772
• 发表日期: 2023
• 关键词: Carbon pricing; Border adjustment; Climate clubs; International dynamic general equilibrium; MODEL; Sectoral heterogeneity; Input-output matrix

摘要

In a dynamic, three-region environmental multi-sector general equilibrium model, we find that carbon pricing generates a long-lasting downturn as production costs rise. Dirty production is shifted towards countries with laxer climate policies, known as carbon leakage. A border adjustment tax mitigates but does not prevent carbon leakage. Its impact on emissions is limited, and it mainly protects dirty domestic production sectors with tradeable goods (in relative terms). Benefits from lower emissions damage materialize only in the medium to long run. From the perspective of a region that introduces carbon pricing, the downturn is smaller and long-run benefits are larger if more regions participate. However, for non-participating regions, there is no incremental incentive to participate as they forego trade spillovers and face higher production costs along the transition. Because of the costly transition, average world welfare may fall as a result of global carbon pricing unless the rich assist the poor.& COPY; 2023 Elsevier B.V. All rights reserved.