The Potential of Tariff Policy for Climate Change Mitigation: Legal and Economic Analysis

Cottier, Thomas; Nartova, Olga; Shingal, Anirudh (2011). The Potential of Tariff Policy for Climate Change Mitigation: Legal and Economic Analysis (NCCR Trade Working Paper 2011/36). Bern: NCCR Trade Regulation

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This paper addresses a potential role that tariffs and tariff policy can play in encouraging countries to take part in a multilateral effort to mitigate climate change. It begins by assessing whether increasing tariffs on products from energy intensive or polluting industries amounts to a violation of WTO rules and whether protectionism in this case can be differentiated from genuine environmental concerns. It then argues that while lowering tariffs for environmental goods can serve as a carrot to promote dissemination of cleaner technologies, tariff deconsolidation is a legitimate stick to encourage polluting countries to move towards an international climate agreement. The paper further explores this view by undertaking a partialequilibrium simulation analysis to examine the impact of a unilateral unit increase in tariffs on the imports of the most carbon-intensive products from countries not committed to climate polices. Our results suggest that the committed importing countries would have to raise their tariffs only slightly to effect a significant decline in the imports of these products from the non-committed countries. For instance, a unit increase in the simple average applied tariffs on the imports of these carbon-intensive products in 2005 from our sample of non-committed exporting countries would reduce the imports of these products by an average 32.6% in Australia, 178% in Canada, 195% in the EU, 271% in Japan and 62% in the US, therebysuggesting the effectiveness of such a measure in pushing countries towards a global climate policy.

Item Type:

Working Paper

Division/Institute:

02 Faculty of Law > Department of Economic Law > NCCR International Trade Regulation

UniBE Contributor:

Cottier, Thomas; Nartova, Olga and Shingal, Anirudh

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics
300 Social sciences, sociology & anthropology > 340 Law

Series:

NCCR Trade Working Paper

Publisher:

NCCR Trade Regulation

Funders:

[4] Swiss National Science Foundation

Language:

English

Submitter:

Rebecca Anne Gilgen

Date Deposited:

16 Aug 2016 16:35

Last Modified:

01 Jun 2017 12:22

Related URLs:

JEL Classification:

Q50, Q54, Q58

BORIS DOI:

10.7892/boris.83806

URI:

https://boris.unibe.ch/id/eprint/83806

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