Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Climate Change Mitigation 6: Carbon Border Adjustments Location: B011 Session Chair: Robin Sogalla, University of Mannheim and Kiel Institute for the World Economy | |
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Unilateral Carbon Pricing and Heterogeneous Firms University of Mannheim Carbon leakage limits the effectiveness of unilateral climate policy. This paper develops a quantitative general equilibrium trade model with global value chains, carbon emissions, and heterogeneous firms to study the effect of carbon pricing and leakage mitigation tools. I show that the selection of heterogeneous firms generates first-order consumption effects of carbon pricing by affecting firm entry across sectors. An application to EU climate policy highlights that these selection effects increase the consumption loss of carbon pricing. At the same time, they create scope for recycling carbon revenues toward industrial policy, which limits these losses. The results further indicate a trade-off across common leakage mitigation tools. Border adjustments more effectively reduce leakage, while output-based rebates attenuate consumption losses. | |