Book contents
- Frontmatter
- Contents
- Conference Participants
- 1 Introduction
- 2 Distributional Impacts of Carbon Pricing Policies in the Electricity Sector
- 3 Distributional Impacts of a U.S. Greenhouse Gas Policy
- 4 Instrument Choice Is Instrument Design
- 5 Taxes, Permits, and Climate Change
- 6 Border Adjustments for Carbon Taxes and the Cost of Emissions Permits
- 7 Taxes and Caps as Climate Policy Instruments with Domestic and Imported Fuels
- 8 How Much Should Highway Fuels Be Taxed?
- 9 State Tax Policy and Oil Production
- 10 The Social Costs and Benefits of U.S. Biofuel Policies with Preexisting Distortions
- Index
- References
6 - Border Adjustments for Carbon Taxes and the Cost of Emissions Permits
Economic, Administrative, and Legal Issues
Published online by Cambridge University Press: 01 June 2011
- Frontmatter
- Contents
- Conference Participants
- 1 Introduction
- 2 Distributional Impacts of Carbon Pricing Policies in the Electricity Sector
- 3 Distributional Impacts of a U.S. Greenhouse Gas Policy
- 4 Instrument Choice Is Instrument Design
- 5 Taxes, Permits, and Climate Change
- 6 Border Adjustments for Carbon Taxes and the Cost of Emissions Permits
- 7 Taxes and Caps as Climate Policy Instruments with Domestic and Imported Fuels
- 8 How Much Should Highway Fuels Be Taxed?
- 9 State Tax Policy and Oil Production
- 10 The Social Costs and Benefits of U.S. Biofuel Policies with Preexisting Distortions
- Index
- References
Summary
Introduction
Under the Kyoto Protocol, most advanced countries other than the United States committed to reduce emissions of CO2 occurring within their boundaries, on average, to 95 percent of their 1990 levels between 2008 and 2012. By comparison, the protocol exempted developing countries from the requirement to reduce CO2 emissions. Although the protocol does not prescribe the means to be employed to achieve this target, it is anticipated that either carbon taxes or cap-and-trade systems – hereafter referred to as carbon pricing – will play an important role. The first carbon pricing systems to be implemented rely on what, in the tax literature, would be called origin-based systems for pricing carbon embedded in internationally traded products.
For example, under the European Union's Emissions Trading System (ETS), by far the most important extant system for pricing carbon, emissions permits are required to engage in production in a member state that entails emissions of CO2. Exports are not exempt from the requirement to hold permits, and the cost of permits for carbon emissions embedded in the cost of exports is not rebated when products are exported. Conversely, it is not necessary to hold CO2 emissions permits of EU members of destination to import into the EU products that would be subject to the requirement for emissions permits if produced within the EU. The first column of Table 6.1 describes the treatment of international trade under an origin-based system, for both carbon taxes and a cap-and-trade system.
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- Information
- US Energy Tax Policy , pp. 193 - 232Publisher: Cambridge University PressPrint publication year: 2010