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Cited by 63Climate Change Policy and EconomicsEnergy, Environment, and Transportation PoliciesGlobal trade and economics

THE DESIGN OF BORDER ADJUSTMENTS FOR CARBON PRICES

Kortum, Samuel, Weisbach, David·2017·National Tax Journal
DOI 10.17310/ntj.2017.2.07
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Abstract

We consider the economics and the design of border adjustments (BAs) under a carbon tax. BAs under a carbon tax are taxes on imports and rebates on exports, based on the emissions from the production of a good. They are thought to be a method of reducing inefficiencies from a unilateral carbon price, such as shifts in the location of production, known as leakage. After examining the basic economics of BAs, we examine three design issues: which goods BAs should apply to, which emissions from the production of those goods should be taxed, and from and to which countries BAs should apply. We conclude that BAs will impose high administrative costs and need stronger welfare justifications.

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Crossref · 10.17310/ntj.2017.2.07

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  • Even if export rebates were allowed, it would create an incentive to reshuffle within a product or material category; businesses would sell products made with low-carbon footprints, diverting high-carbon outputs to countries that do not assess and price the carbon content of imports.

    “Even if export rebates were allowed, it would create an incentive to reshuffle within a product or material category; i.e., businesses would sell products made with low-carbon footprints-diverting, in jurisdictions with such incentives, high-carbon outputs to countries that do not assess and price the carbon content of imports (98, 102, 103).”

    From Carbon Leakage, Consumption, and Trade (2022) · cites this paper as [103]

  • Tracing the actual embodied emissions along global value chains for innumerable final products requires enormous administrative efforts and coordination to ensure a high level of quality while minimizing the risk of fraud.

    “However, tracing the actual embodied emissions along global value chains for innumerable final products requires enormous administrative efforts and coordination to ensure a high level of quality while minimizing the risk of fraud (98, 103) (see Section 3).”

    From Carbon Leakage, Consumption, and Trade (2022) · cites this paper as [103]

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Authors
Kortum, S., & Weisbach, D.
ORCID
Weisbach, David
Venue
National Tax Journal
Publisher
University of Chicago Press
Published
2017-06-01
Volume
70
Issue
2
Pages
421-446
ISSN
  • 0028-0283 (ISSN-L)
  • 1944-7477
DOI
10.17310/ntj.2017.2.07
OpenAlex
W2609882042
Cited by
63
References
7
Citations by year
2026: 4 · 2025: 9 · 2024: 9 · 2023: 8 · 2022: 14 · 2021: 8 · 2020: 1 · 2019: 2 · 2018: 7 · 2017: 1
FWCI
5.41
Type
journal article
Language
en
Open access
closed
Locations
  • National Tax Journal (publishedVersion)
  • bepress Legal Repository (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
  • Physical Sciences › Energy › Renewable Energy, Sustainability and the Environment › Energy, Environment, and Transportation Policies
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
Keywords
border adjustment, carbon tax, carbon pricing, carbon leakage, tariffs, export rebates, administrative costs

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