Influence Of Carbon Tariff On Company Behavior, Country Welfare And Carbon Leakage

The speeding process of globalization and the hit of global financial crisis havebeen aggravating the imbalance of global economy. To maintain the dominantposition in international trade, developed countries has brought out a new concept,that is, low carbon economy, along with the environmental protection theory. As acarbon emission mitigation policy, carbon tariff arouses much attention amongacademics.Based on the realistic background of carbon tariff policy, the paper did aliterature review about the related analytical methods and conclusions. Then byqualitative analysis, the theoretical base of carbon tax and carbon tariff isdemonstrated. It’s concluded from both economy and taxation perspective that carbontariff is a kind of Pigouvian tax and within the definition of border tax adjustment byWTO. Analyzed from the global economy point of view, it’s concluded that carbontariff has a positive influence on industrial development, technical advancement andglobal industrial restructuring, while it will also increase trade friction, intensifyunfair competition, as well as damage the welfare of related countries.Through Cournot Oligopoly model with carbon tax and carbon tariff as majorvariables, it is thought that carbon tax and carbon tariff have certain positivesignificance on carbon emission mitigation. Theoretically, carbon tariff is an essentialcomplement of carbon tax in the emission mitigation measure system. On the otherhand, carbon tariff does not necessarily protect the interests and competitiveadvantages of policy maker but harm the country welfare.In conclusion, it is considered that the policy maker should pay great attentionsof the consequences of increasing production cost by imposing carbon mitigationpolicy, and the influences on companies, industrial competitiveness, country welfareand the environment, when making policy decision.