Unilateral Climate Policy Design: Efficiency and Equity Implications of Alternative Instruments to Reduce Carbon Leakage. Böhringer, C.; Carbone, J. C.; and Rutherford, T. F. Energy Economics.
Unilateral Climate Policy Design: Efficiency and Equity Implications of Alternative Instruments to Reduce Carbon Leakage [link]Paper  doi  abstract   bibtex   
Global cost-effectiveness of unilateral emission abatement can be seriously hampered by carbon leakage. We assess three widely discussed proposals for leakage reduction: carbon-motivated border tax adjustments, industry exemptions from carbon regulation, and output-based allocation of emission allowances. We find that none of these measures amounts to a “magic bullet” when both efficiency and equity criteria matter. Compared to unilateral emission pricing alone, border carbon adjustments are most effective in leakage reduction and promotion of global cost-effectiveness but can markedly exacerbate regional inequality; exemptions and output-based allocation tend to avoid distributional pitfalls but are less effective in leakage reduction and global cost savings; exemptions may even decreae global cost-effectiveness of unilateral emission abatement.
@article{bohringer_unilateral_????,
	title = {Unilateral {Climate} {Policy} {Design}: {Efficiency} and {Equity} {Implications} of {Alternative} {Instruments} to {Reduce} {Carbon} {Leakage}},
	issn = {0140-9883},
	shorttitle = {Unilateral {Climate} {Policy} {Design}},
	url = {http://www.sciencedirect.com/science/article/pii/S0140988312002253?v=s5},
	doi = {10.1016/j.eneco.2012.09.011},
	abstract = {Global cost-effectiveness of unilateral emission abatement can be seriously hampered by carbon leakage. We assess three widely discussed proposals for leakage reduction: carbon-motivated border tax adjustments, industry exemptions from carbon regulation, and output-based allocation of emission allowances. We find that none of these measures amounts to a “magic bullet” when both efficiency and equity criteria matter. Compared to unilateral emission pricing alone, border carbon adjustments are most effective in leakage reduction and promotion of global cost-effectiveness but can markedly exacerbate regional inequality; exemptions and output-based allocation tend to avoid distributional pitfalls but are less effective in leakage reduction and global cost savings; exemptions may even decreae global cost-effectiveness of unilateral emission abatement.},
	number = {0},
	urldate = {2012-10-05},
	journal = {Energy Economics},
	author = {Böhringer, Christoph and Carbone, Jared C. and Rutherford, Thomas F.},
	keywords = {Border Carbon Adjustments, Efficiency-Equity Trade-Offs, Exemptions, Leakage, Output-Based Allocation, Unilateral Climate Policy}
}
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