Pareto-Efficient International Taxation in the Presence of Environmental Externalities

Ogawa, Yoshitomo; Yanase, Akira

doi:10.1628/fa-2019-0007

“…We highlight two important issues that have not been addressed in the current paper. First, it would be worthwhile investigating how we should coordinate environmental and trade polices such as import tariffs (Keen and Kotsogiannis 2014;Lai and Hu 2008;Ogawa and Yanase 2019;Sanctuary 2018;Yomogida and Tarui 2013). In the age of the second unbundling, the location of parts is sensitive to the international cost differences generated by both policy measures.…”

Section: Discussionmentioning

confidence: 99%

“…5 See alsoWan and Wen (2017). Some studies consider a wider variety of policy tools, including border tax adjustments as well as emission taxes, although they do not allow for vertical linkages(Keen and Kotsogiannis 2014;Lai and Hu 2008;Ogawa and Yanase 2019;Sanctuary 2018;Yomogida and Tarui 2013).…”

mentioning

confidence: 99%

Is Environmental Tax Harmonization Desirable in Global Value Chains?

Cheng

¹

,

Kato

²

,

Obashi

³

2020

The B.E. Journal of Economic Analysis &Amp; Policy

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The spatial unbundling of parts production and assembly currently characterizes globalization, leading to the worldwide dispersion of pollution. We consider socially optimal (cooperative) environmental taxes in a two-country model of global value chains in which the location of both parts and assembly can differ. When unbundling costs are so high that parts and assembly must colocate in the pre-globalized world, pollution is spatially concentrated, and harmonizing environmental taxes maximizes global welfare. In contrast, with low unbundling costs triggering the dispersion of parts and thus pollution throughout the world as today, harmonization fails to maximize global welfare. Similar results hold when the two countries non-cooperatively choose their environmental taxes.

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“…Lastly, we highlight two important issues that have not been addressed in the current paper. First, it would be worthwhile investigating how we should coordinate environmental and trade polices such as import tariffs (Lai and Hu, 2008;Yomogida and Tarui, 2013;Keen and Kotsogiannis, 2014;Sanctuary, 2018;Ogawa and Yanase, 2019). In the age of the second unbundling, the location of parts is sensitive to the international cost differences generated by both policy measures.…”

Section: Concluding Discussionmentioning

confidence: 99%

“…3 See also Wan and Wen (2017). Some studies consider a wider variety of policy tools, including border tax adjustments as well as emission taxes, although they do not allow for vertical linkages (Lai and Hu, 2008;Yomogida and Tarui, 2013;Keen and Kotsogiannis, 2014;Sanctuary, 2018;Ogawa and Yanase, 2019). trade models are not sufficient to achieve the social optimum.…”

Section: Introductionmentioning

confidence: 99%

Is Environmental Tax Harmonization Desirable in Global Value Chains?

Cheng

¹

,

Kato

²

,

Obashi

³

2019

View full text Add to dashboard Cite

The spatial unbundling of parts production and assembly currently characterizes globalization, leading to the worldwide dispersion of pollution. We consider socially optimal (cooperative) environmental taxes in a two-country model of global value chains in which the location of both parts and assembly can differ. When unbundling costs are so high that parts and assembly must colocate in the pre-globalized world, pollution is spatially concentrated, and harmonizing environmental taxes maximizes global welfare. In contrast, with low unbundling costs triggering the dispersion of parts and thus pollution throughout the world as today, harmonization fails to maximize global welfare. Similar results hold when the two countries non-cooperatively choose their environmental taxes.

show abstract

International Stability under Iterated Sanctions and Counter-sanctions

Fradkov

2023

IFAC-PapersOnLine

0

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Pareto-Efficient International Taxation in the Presence of Environmental Externalities

Cited by 3 publications

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Is Environmental Tax Harmonization Desirable in Global Value Chains?

Is Environmental Tax Harmonization Desirable in Global Value Chains?

Is Environmental Tax Harmonization Desirable in Global Value Chains?

International Stability under Iterated Sanctions and Counter-sanctions

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