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American Economic Review Vol. 101 No. 3 2011

The Role of Trade and Competitiveness Measures in US Climate Policy

Carolyn Fischer1; Alan K. Fox2

1 Resources for the Future, 1616 P Street, NW, Washington, DC 20036. · 2 Office of Economics of the United States International Trade Commission (ITC), 500 E Street SW, Washington, DC 20436.

Abstract

We review the proposed measures for addressing competitiveness and carbon leakage concerns in recent US climate policy legislation. For eligible energy-intensive, trade-exposed sectors, output-based rebates would initially dampen cost increases; later, border adjustments would ensure that imports face comparable cost burdens. Both measures can in theory enhance the economic efficiency of carbon reduction efforts, but both pose some interesting economic and practical trade-offs. This paper discusses our recent research into the welfare and carbon leakage effects of using output-based allocation and trade measures in conjunction with climate policies.

DOI
10.1257/aer.101.3.258
Volume
101
Issue
3
Pages
258-262
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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