Carbon tariff has been widely studied as a prominent climate policy in terms of its influences on the economy and the environment. However, previous studies of its effectiveness did not incorporate into the analysis of some key factors, including, notably, trade elasticities. This paper aims at...

Recent theoretical work on international trade emphasizes the importance of trade elasticity as the fundamental statistic needed to conduct welfare analysis. Eaton and Kortum (2002) proposed a two-step method to estimate this parameter, where exporter fixed effects are regressed on proxies for...