Carbon tariffs (or border carbon adjustments) might prevent some, but not all,[156] carbon leakage and reduce emissions. But they are quite difficult to calculate (calculating the carbon intensity of every imported good) and might lower trade flows and welfare, especially in emerging economies.[157]
Generally, I thought there was surprisingly little research on carbon tariffs, even though, as your intuition shows, they should go hand in hand with carbon taxes.
Crucially, even if we were to have perfect carbon taxes and tariffs, UK emissions only make up 3% and shrinking of the global total.
Yes, this is an intuition I had as well.
Carbon tariffs (or border carbon adjustments) might prevent some, but not all,[156] carbon leakage and reduce emissions. But they are quite difficult to calculate (calculating the carbon intensity of every imported good) and might lower trade flows and welfare, especially in emerging economies.[157]
Generally, I thought there was surprisingly little research on carbon tariffs, even though, as your intuition shows, they should go hand in hand with carbon taxes.
Crucially, even if we were to have perfect carbon taxes and tariffs, UK emissions only make up 3% and shrinking of the global total.