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Border Adjustments Supplementing Nationally Determined Carbon Pricing

机译：补充国家确定的碳定价的边境调整

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摘要

As agreed on in the Paris Agreement, each country determines its own contribution to combat climate change on a voluntary basis. There is no mechanism to force a country to comply with its own nationally determined contributions. This bottom-up approach builds on unilateral actions and yields a kind of carbon pricing, which is not necessarily identical across countries. As a consequence, these nationally determined climate policies have drawbacks in terms of carbon leakage and loss of competitiveness for firms producing in high carbon price countries. To reduce these negative effects, border adjustments (BAs) may be appropriate subsequent to more stringent environmental regulation. We model a three-stage game involving carbon price competition in the first stage, the introduction of BAs in the second stage and oligopolistic competition between firms in the third stage. Strategic trade theory suggests that the qualitative results about the optimal BA policy may vary with the underlying type of competition, namely Bertrand and Cournot competition. However, our results are similar for both types of competition. We conclude that BAs are suitable for supporting a more stringent environmental policy. Moreover, we find that anticipation of the implementation of BAs in the second stage yields higher average carbon prices in the first stage since high carbon price countries increase their carbon prices whereas the other countries partially offset.
机译：根据巴黎协议的商定，每个国家决定了自愿基础对抗气候变化的贡献。没有机制来迫使一个国家遵守自己的国家决定捐款。这种自下而上的方法在单方面行动中建立并产生了一种碳定价，这些碳定价在国家不一定相同。因此，这些国家最终的气候政策在碳泄漏和高碳价格国家生产企业的碳泄漏和竞争力丧失方面具有缺陷。为了减少这些负面影响，在更严格的环境监管之后，边界调整（BAS）可能是适当的。我们在第一阶段模拟了涉及碳价格竞争的三阶段游戏，在第三阶段的第二阶段和寡头垄断竞争中引入了基础。战略贸易理论表明，关于最佳BA政策的定性结果可能因竞争类型，即Bertrand和Cournot竞争而异。但是，我们的两种类型的竞争都是类似的。我们得出结论，BAS适合支持更严格的环境政策。此外，我们发现，由于高碳价格国家提高碳价格，而另一项国家部分抵消，我们发现对第二阶段实施的基础上的实施产生了更高的平均碳价格。

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