Carbon border taxes
Carbon border taxes can benefit developing countries by leveling the playing field, addressing carbon leakage, and incentivizing emissions reduction. Different policy choices may vary by country, impacting emissions and the economy. Understanding these effects is crucial for informed decision-making on carbon pricing strategies.
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Presentation Transcript
Carbon border taxes What is in them for developing countries? Harun Onder World Bank
No carbon price single sector Price & the value of marginal product of emissions in the developing economy Price & the value of marginal product of emissions in the advanced economy ? ? ? ?0 ? Developing economy emissions Advanced economy emissions
A common carbon price- single sector Price & the value of marginal product of emissions in the developing economy Price & the value of marginal product of emissions in the advanced economy ? ? ? ? ?1 ?1 ? ?1 ?0 ? ?1 Developing economy emissions Advanced economy emissions
No carbon price in the developing country single sector Price & the value of marginal product of emissions in the developing economy Price & the value of marginal product of emissions in the advanced economy ? ? The policy choice will vary by country! ? ?2 ? ? ?1 ?1 ? ? ?1 ?0 ?2 ? ?1 Developing economy emissions Advanced economy emissions
Multiple sectors Scale effect In some circumstances, developing country emissions can increase as a result of the CBAM! Composition effect Technique effect
