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Study on Carbon Tariffs and Incentive-Restraint Mechanism for a Better Resoultion of Claimate Change Issues

Author: LiJing
Tutor: WuMeiHua
School: Nanjing University of Finance and Economics
Course: Finance
Keywords: Global Public Goods Global Carbon Emissions Reduction Carbon Tariff Incentive Mechanism
CLC: X196
Type: Master's thesis
Year: 2011
Downloads: 54
Quote: 0
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Abstract


Currently, there is much controversy between countries about the solution of Climate Change, of which the most fiercely is that the United States proposed in 2009 that it will tariffs on goods from countries whose goods have failed to meet carbon emission standards by 2020. The emergence of carbon tariffs comes from the worries of the United States and other developed countries about that difference in carbon reduction policies will lead to "carbon leakage" and "loss of competitiveness." Our government and academia have pointed out that the U.S. behavior was by "climate protection" in the name of the line "trade protection”. I agree with them. However, how can we effectively address global climate issues? Whether Carbon Tariffs in the end or to what extent can act as a "climate protection" role? Research on such issues is mixed. This paper attempts to supply global public goods perspective of research to answer these questions.In the second chapter, Climate Issues and WTO free trade system, the nature of global public goods, my analysis shows that contributions by countries to solve the climate problem and the efforts made by the free trade advocated by WTO regime both can be seen as global public goods. And the existence of Climate Change problem and trade friction between countries indicates inadequate supply of global public goods. Therefore, to solve both of the problems, effective incentive and restraint mechanisms to promote the supply of global public goods need to be made.In the third chapter, I use theory of selective excitation by Olsen to analyze the actual effect of carbon tariffs as a means of carbon reduction incentive constraint. Carbon tariffs can be seen as issues to address global climate selective excitation of sovereign states. My studies show that the actual effect of carbon tariffs, if implemented, to he United States and other developed they will be an incentive measures, while to developing countries including China, they are the restrictive constraints. As China and other developing countries lack carbon emissions capacity in the short term (technical aspects), the real effect of carbon tariffs on China and other developing countries to constrain carbon emissions is limited, but it will bring negative effects that reduce the capacity development to carbon emissions in China and other developing countries. Therefore, the carbon tariff is not an effective incentive-constraint means to limit global carbon emissions.. In the fourth chapter, I use economic incentive mechanism design theory to try establishing an effective incentive and restraint mechanisms to resolve Climate Change problem, and use the successful "Montreal Protocol" case analysis to show that a country’s decision-making and actions in the international scope will not only consider the contrast between economic costs and benefits, but also consider other non-economic factors. Based on this, I suggest that non-economic areas of national interests, including a country’s international political status, their international images, reputation, and so on, are included in the scope of global carbon emissions to expand channels of incentives to get out of the trouble.

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CLC: > Environmental science, safety science > The basic theory for the Environment and Science > Environmental Economics
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