Study finds carbon tariffs alone are half as effective as combined domestic carbon tax and tariff policy
By
Gregory Casey,
Day-old at best. Try it dunked in something stronger.
Summary
This NBER research paper examines whether carbon import tariffs can function effectively as standalone climate policies, or if they require a domestic carbon tax to be effective. Using a quantitative trade model focused on carbon-intensive, trade-exposed sectors, the study finds that U.S. carbon tariffs alone increase domestic emissions while lowering foreign emissions, achieving only half the global emissions reductions of a combined policy (tariff plus domestic carbon tax). Both approaches increase U.S. GDP and wages, but the standalone tariff is less effective for global climate goals.
Key quotes
· 3 pulledCarbon import tariffs, traditionally considered a complement to domestic climate policy, are increasingly proposed as standalone policies.
A U.S. carbon tariff increases U.S. emissions, lowers foreign emissions, and on net achieves half the global emissions reductions of the combined policy, which lowers both U.S. and foreign emissions.
Both approaches increase U.S. GDP and wages.
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