tailieunhanh - Carbon Tariffs: Impacts on Technology Choice, Regional Competitiveness, and Global Emissions

The review of other jurisdictions indicated that there was no jurisdiction that regulated pulp mills for colour on a technology basis. Available literature indicates application of the BATEA outlined in section to minimize BOD and AOX releases will also result in minimization of colour to 50 kg/ADt or less. However, Alberta Environment requires colour standards for any newly constructed pulp and paper mill until the mill can demonstrate consistent wastewater colour levels below the colour standards. This is to verify optimal performance of the technology to minimize colour levels. Existing mills that have implemented BATEA. | HARVARD BUSINESS SCHOOL Carbon Tariffs Impacts on Technology Choice Regional Competitiveness and Global Emissions David F. Drake Working Paper 12-029 October 19 2011 Copyright 2011 by David F. Drake Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Carbon Tariffs Impacts on Technology Choice Regional Competitiveness and Global Emissions David F. Drake Harvard Business School Harvard University Boston MA 02163 ddrake@ Carbon regulation is intended to reduce global emissions but there is growing concern that such regulation may simply shift production to unregulated regions potentially increasing overall carbon emissions in the process. Carbon tariffs have emerged as a possible mechanism to address this concern by imposing carbon costs on imports at the regulated region s border. Advocates claim that such a mechanism would level the playing field whereas opponents argue that such a tariff is anti-competitive. This paper analyzes how carbon tariffs affect technology choice regional competitiveness and global emissions through a model of imperfect competition between domestic . carbon-regulated firms and foreign . unregulated firms where domestic firms have the option to offshore production and the number of foreign entrants is endogenous. Under a carbon tariff results indicate that foreign firms would adopt clean technology at a lower emissions price than domestic producers with the number of foreign entrants increasing in emissions price only over intervals where foreign firms hold this technology advantage. Further domestic firms would only offshore production under a carbon tariff to adopt technology strictly cleaner than technology utilized domestically. As a consequence under a carbon tariff foreign market share is non-monotonic in emissions price and global .