The role of trade and competitiveness measures in US climate policy

Carolyn Fischer*, Alan K. Fox

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

We review the proposed measures for addressing competitiveness and carbon leakage concerns in recent US climate policy legislation. For eligible energy-intensive, tradeexposed 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.

Original languageEnglish
Pages (from-to)258-262
Number of pages5
JournalAmerican Economic Review
Volume101
Issue number3
DOIs
Publication statusPublished - May 2011

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