NBER Study Analyzes Optimal EV Tariffs and Subsidies for Green Transition
By
Panle Jia Barwick,
Summary
This research paper from the National Bureau of Economic Research (NBER) examines the optimal design of trade and industrial policy when governments pursue environmental goals alongside traditional national welfare. Using the global transition to electric vehicles (EVs) as a motivating case study, the authors develop a framework where policymakers choose tariffs and domestic production subsidies to maximize national welfare—defined as consumer surplus, domestic profits, environmental benefits, and tariff revenue net of subsidies. The analysis combines a theoretical model of differentiated-product oligopoly to explore the intersection of trade policy (tariffs) and environmental/industrial policy (subsidies) in the EV market.
Source
Twitter / XNBER Study Analyzes Optimal EV Tariffs and Subsidies for Green Transitionnber.orgKey quotes
· 3 pulledWe study the optimal design of trade and industrial policy when governments pursue environmental objectives alongside traditional national welfare.
Motivated by the global transition to electric vehicles (EVs) and growing concerns about competitiveness, resilience, and the environment, we develop a framework in which policymakers choose tariffs and domestic production subsidies to maximize national welfare.
We combine a theoretical model of differentiated-product oligopoly
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