Speaker: Kyle Meng, Associate Professor, Bren School of Environmental Management, University of California-Santa Barbara
Carbon import tariffs, traditionally a complement to domestic climate policy as an adjustment for emissions leakage and competitiveness concerns, are increasingly considered as standalone policies. Meng will discuss a quantitative trade model that compares carbon tariffs with and without domestic pricing policies. With a focus on U.S. policies, Meng will highlight several findings:
- A U.S. carbon tariff lowers foreign emissions but increases U.S. emissions, leading to much smaller global emissions reductions than a combined policy which reduces emissions everywhere.
- Combined policy increases output in sectors where the U.S. has low carbon intensity, implying that the combined policy may be able to overcome political-economy barriers.
- S. welfare increases more under a combined policy from larger avoided climate damages.
- In contrast to traditional climate coalitions built on combined policies, international agreements based only on tariffs achieve declining global GHG reductions when membership expands.