Carbon tariffs are one prominently discussed climate policy. The proponents stress the carbon tariffs’ ability to restore competitiveness, avoid carbon leakage, and reduce world carbon emissions. We analyze the effects of carbon tariffs on trade, welfare, and carbon emissions in a structural...

This volume was prepared by Rahel Aichele while she was working at the ifo Institute. It was completed in December 2012 and accepted as a doctoral thesis by the Department of Economics at the University of Munich. It includes five self-contained chapters. The chapters investigate how, in a...

Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called 'Green Paradox' may occur. We review this literature and identify the key mechanisms behind these...

In theory, market-based regulatory instruments correct market failures at least cost. However, evidence on their efficacy remains scarce. Using administrative data, we estimate that, on average, the EU ETS - the world's first and largest market-based climate policy - induced regulated...

This volume was prepared by Rahel Aichele while she was working at the ifo Institute. It was completed in December 2012 and accepted as a doctoral thesis by the Department of Economics at the University of Munich. It includes five self-contained chapters. The chapters investigate how, in a...

Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called ‘Green Paradox’ may occur. We review this literature and identify the key mechanisms behind...

This volume was prepared by Rahel Aichele while she was working at the ifo Institute. It was completed in December 2012 and accepted as a doctoral thesis by the Department of Economics at the University of Munich. It includes five self-contained chapters. The chapters investigate how, in a...

We estimate CO2 implicitly contained in traded commodities based on the GTAP 7 data: While net carbon imports into the industrialized countries amount to 15% of their total emissions, net carbon exports of the developing countries amount to 12% of their total emissions, and net carbon exports of...

A country's optimal environmental border policy includes a strategic component that is inconsistent with commitments under the General Agreement on Tariffs and Trade (GATT). We extend the theory to include GATT compliance. Theory supports optimal border adjustments on carbon content that are...

We carry out a detailed sensitivity analysis of border carbon adjustment (rates) by applying a global Computable General Equilibrium (CGE) GTAP7-based model. We find different incentives for the regions in the climate coalition to raise carbon-based border tax rates (BTAX) above the standard...