EU carbon border tax: General equilibrium effects on income and emissions
By: Flórez Mendoza, Javier.
Contributor(s): Reiter, Oliver | Stehrer, Robert
.
Material type: 
BookSeries: wiiw Working Papers: 254Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2024Description: 85 S., 11 Table and 36 Figures, 30cm.Subject(s): New quantitative trade model | carbon border adjustment mechanism (CBAM) | trade policy welfare | CO2 emissionsCountries covered: non specificwiiw Research Areas: International Trade, Competitiveness and FDIClassification: F11 | F13 | F14 | F18 | Q56 Online resources: Click here to access online Summary: This paper employs a quantitative trade model to globally assess the implications of the EU carbon border adjustment mechanism (CBAM) on trade flows, welfare, real wages and CO2 emissions. We quantify the general equilibrium effects on EU members and non-members under various carbon tax prices, including a sector-level composition, and also compare the results to a scenario including export rebates. For the EU, we find an increase in the terms of trade and, consequently, small positive welfare effects, although there are tiny negative effects on real wages. Non-EU countries face a decline in the terms of trade and a small welfare loss as well as marginally declining real wages. Global CO2 emissions are marginally reduced, but they slightly increase in the EU due to specialisation effects.
| Cover image | Item type | Current library | Home library | Collection | Shelving location | Call number | Materials specified | Vol info | URL | Copy number | Status | Notes | Date due | Barcode | Item holds | Item hold queue priority | Course reserves | |
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| Paper | WIIW Library | 5.700/254 (Browse shelf(Opens below)) | Available | 1000010007073 |
This paper employs a quantitative trade model to globally assess the implications of the EU carbon border adjustment mechanism (CBAM) on trade flows, welfare, real wages and CO2 emissions. We quantify the general equilibrium effects on EU members and non-members under various carbon tax prices, including a sector-level composition, and also compare the results to a scenario including export rebates. For the EU, we find an increase in the terms of trade and, consequently, small positive welfare effects, although there are tiny negative effects on real wages. Non-EU countries face a decline in the terms of trade and a small welfare loss as well as marginally declining real wages. Global CO2 emissions are marginally reduced, but they slightly increase in the EU due to specialisation effects.
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