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Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization

Jota Ishikawa and Toshihiro Okubo

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper studies greenhouse-gas (GHG) emission controls in the presence of carbon leakage through international firm relocation. The Kyoto Protocol requires developed countries to reduce GHG emissions by a certain amount. Comparing emission quotas with emission taxes, we show that taxes coupled with lower trade costs facilitate more firm relocations than quotas do, causing more international carbon leakage. Thus, if a country is concerned about global emissions, emission quotas would be adopted to mitigate the carbon leakage. Firm relocation entails a trade-off between trade liberalization and emission regulations. Emission regulations may be hampered by trade liberalization, and vice versa.

Keywords: trade liberalization; global warming; Kyoto Protocol; emission tax; emission quota; carbon leakage (search for similar items in EconPapers)
JEL-codes: F18 Q54 (search for similar items in EconPapers)
Date: 2008-11
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd08-013.pdf (application/pdf)

Related works:
Working Paper: Greenhouse-Gas Emission Controls and International Carbon Leakage through Trade Liberalization (2009) Downloads
Working Paper: Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization (2008) Downloads
Working Paper: Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd08-013

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