The global effects of subglobal climate policies
Journal article, Peer reviewed
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http://hdl.handle.net/11250/178124Utgivelsesdato
2010Metadata
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Originalversjon
Christoph Boehringer, Carolyn Fischer, and Knut Einar Rosendahl (2010) “The Global Effects of Subglobal Climate Policies,” The B.E. Journal of Economic Analysis & Policy: Vol. 10: Iss. 2 (Symposium), Article 13.Sammendrag
Individual countries are in the process of legislating responses to the challenges posed by
climate change. The prospect of rising carbon prices raises concerns in these nations about the effects
on the competitiveness of their own energy-intensive industries and the potential for carbon
leakage, particularly leakage to emerging economies that lack comparable regulation. In response,
certain developed countries are proposing controversial trade-related measures and allowance allocation
designs to complement their climate policies. Missing from much of the debate on traderelated
measures is a broader understanding of how climate policies implemented unilaterally (or
subglobally) affect all countries in the global trading system. Arguably, the largest impacts are
from the targeted carbon pricing itself, which generates macroeconomic effects, terms-of-trade
changes, and shifts in global energy demand and prices; it also changes the relative prices of certain
energy-intensive goods. This paper studies how climate policies implemented in certain major
economies (the European Union and the United States) affect the global distribution of economic
and environmental outcomes and how these outcomes may be altered by complementary policies
aimed at addressing carbon leakage.
KEYWORDS: cap-and-trade, emissions leakage, border carbon adjustments, output-based allocation,
general equilibrium model
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