Cost-Effective Unilateral Climate Policy Design: Size Matters. Böhringer, C.; Fischer, C.; and Einar Rosendahl, K. Journal of Environmental Economics and Management.
Cost-Effective Unilateral Climate Policy Design: Size Matters [link]Paper  doi  abstract   bibtex   
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.
@article{bohringer_cost-effective_????,
	title = {Cost-{Effective} {Unilateral} {Climate} {Policy} {Design}: {Size} {Matters}},
	issn = {0095-0696},
	shorttitle = {Cost-{Effective} {Unilateral} {Climate} {Policy} {Design}},
	url = {http://www.sciencedirect.com/science/article/pii/S0095069614000059},
	doi = {10.1016/j.jeem.2013.12.008},
	abstract = {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.},
	urldate = {2014-02-09},
	journal = {Journal of Environmental Economics and Management},
	author = {Böhringer, Christoph and Fischer, Carolyn and Einar Rosendahl, Knut},
	keywords = {Border Carbon Adjustments, Emissions leakage, Output-based rebates},
	file = {ScienceDirect Full Text PDF:files/48298/Böhringer et al. - Cost-Effective Unilateral Climate Policy Design S.pdf:application/pdf;ScienceDirect Full Text PDF:files/49066/Böhringer et al. - 2014 - Cost-effective unilateral climate policy design S.pdf:application/pdf;ScienceDirect Snapshot:files/48299/S0095069614000059.html:text/html;ScienceDirect Snapshot:files/49067/S0095069614000059.html:text/html}
}
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