Carbon Leakage – Are Tariffs a Necessary Tool in Climate Policy?

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi
dc.contributor.advisor Liski, Matti
dc.contributor.author Helminen, Tuomas
dc.date.accessioned 2017-07-04T08:46:37Z
dc.date.available 2017-07-04T08:46:37Z
dc.date.issued 2017
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/27265
dc.description.abstract In absence of binding global agreements on climate policy some regions like the European Union have decided to take unilateral actions to reduce their greenhouse gas emissions. These unilateral actions have raised carbon leakage as an important policy issue to be addressed. Carbon leakage means that emission reductions in one region may be offset at least partially by emission increases in the rest of the world as fossil fuel prices fall and domestic companies lose their market shares. This thesis will review the literature concerning the magnitude of the carbon leakage effects and measures to prevent it. The results of these studies are assessed in light of an optimal carbon tariff and tax model introduced by Hoel (1996). The work will provide an overview on estimates of the scale of carbon leakage rate, in addition to an assessment of carbon tariffs and current policy measures as tools to prevent leakage. The findings suggest that carbon leakage is probably a remarkable threat only in certain energy-intensive sectors most exposed to foreign competition. Carbon tariffs or other border adjustments would therefore be limited in scope as a tool of climate policy. Their cost-effectiveness in global emission policy is doubtful, as they would mostly shift the cost burden from developed to developing world, rather than reducing emissions globally. This implies that tariffs would not be a necessary tool in unilateral climate policy. However, the same critique applies to the current measures in the EU as well. Also, the free permit allocation system currently in use is probably too lax, and thus produces effects contrary to the goals of emission policy while providing little protection for domestic industries. en
dc.format.extent 63
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Carbon Leakage – Are Tariffs a Necessary Tool in Climate Policy? en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Taloustieteen laitos fi
dc.subject.keyword carbon leakage en
dc.subject.keyword climate economics en
dc.subject.keyword climate policy en
dc.subject.keyword carbon tariffs en
dc.subject.keyword border carbon adjustments en
dc.identifier.urn URN:NBN:fi:aalto-201707046299
dc.type.ontasot Master's thesis en
dc.type.ontasot Maisterin opinnäyte fi
dc.programme economics en
dc.subject.helecon taloustieteet fi
dc.subject.helecon sustainability en
dc.subject.helecon ympäristöpolitiikka fi
dc.subject.helecon energiapolitiikka fi
dc.ethesisid 15057
dc.location P1 I fi


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