Cost-effective unilateral climate policy design: : Size matters

• Autores: Christoph Böhringer, Carolyn Fischer, Knut Einar Rosendahl
• Localización: Journal of Environmental Economics and Management, ISSN-e 1096-0449, Vol. 67, Nº. 3, 2014, págs. 318-339
• Idioma: inglés
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• Resumen

  • Given the bleak prospects for a global agreement on mitigating climate change, pressure for unilateral abatement is increasing. A major challenge is emissions leakage. Border carbon adjustments and output-based allocation of emissions allowances can increase effectiveness of unilateral action but introduce distortions of their own. We assess antileakage measures as a function of abatement coalition size. We first develop a partial equilibrium analytical framework to see how these instruments affect emissions within and outside the coalition. We then employ a computable general equilibrium model of international trade and energy use to assess the strategies as the coalition grows. We find that full border adjustments rank first in global cost-effectiveness, followed by import tariffs and output-based rebates. The differences across measures and their overall appeal decline as the abatement coalition grows. In terms of cost, the coalition countries prefer border carbon adjustments; countries outside the coalition prefer output-based rebates.