@article{Bollen:332102,
      recid = {332102},
      author = {Bollen, Johannes and Koutstaal, Paul and Veenendaal, Paul},
      title = {Do border measures affect carbon leakage?},
      address = {2011},
      pages = {35},
      year = {2011},
      note = {Presented at the 14th Annual Conference on Global Economic  Analysis, Venice, Italy},
      abstract = {In this paper we quantify the effects of the pledged  commitments that have been made after the Copenhagen  Climate Change Conference in December 2009 making use of  the CGE-model WorldScan. We analyze the impacts of climate  policy variants up to the year 2020, in particular on  economic welfare and carbon leakage. We consider two main  policy cases: ambitious and modest pledges. In the first  case Annex I countries ambitiously adopt relatively low  caps on GHG-emissions and allow free permit trade amongst  each other. In this scenario China and India impose  relative targets for CO2 emission-intensities of 45% and  25% below 2005 intensities. In the second case Annex I  countries impose modest emission ceilings without permit  trade and without the use of CDM. In this scenario China  and India impose more modest relative targets too. Only in  the EU permit trade occurs, separately within the Emissions  Trading Scheme (ETS) and within the sectors outside ETS. In  addition, we consider various variants for the case of  modest pledges. The most important of these are: allowing  Annex I countries to use CDM up to one third of the  reduction effort and allowing industrialized countries to  apply border measures (BM) for the ETS-sectors. In the BM  case we assume that Annex I countries simultaneously adopt  carbon import levies and carbon export refunds on all trade  with non-Annex I. The level of these border measures is  based upon the average prevailing direct and indirect  carbon costs in domestic production of the ETSsectors. In  all policy cases carbon leakage is considerable. Production  leakage in absolute terms is rather modest though. Our  simulations suggest that border measures are rather  ineffective in reducing leakage. With additional  simulations we show that the fossil fuel price channel is  the most important cause of carbon leakage. Because border  measures do not address this channel, they hardly affect  carbon leakage.},
      url = {http://ageconsearch.umn.edu/record/332102},
}