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Identifier to cite or link to this item: https://hdl.handle.net/10086/31112

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Title
Is Environmental Tax Harmonization Desirable in Global Value Chains?
Creator
Creator Name
Cheng, Haitao Cheng, Haitao
成, 海涛 成, 海涛
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Kato, Hayato Kato, Hayato
加藤, 隼人 加藤, 隼人
Affiliation
Affiliation Name
Osaka University
Creator Name
Obashi, Ayako Obashi, Ayako
小橋, 文子 小橋, 文子
Affiliation
Affiliation Name
Aoyama Gakuin University
Key Word
Environmental policy
Fragmentation
Emission tax competition
International coordination
Trade in parts and components
JEL
F18
F23
Q56
Q58
Abstract (distribution restricted)
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.
Publisher
Graduate School of Economics, Hitotsubashi University
Issued Date
2020-04
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion papers ; No. 2020-04
Number of Pages
38
Sponsorship
Financial supports from the JSPS (JP16J01228; JP19K13693) and the Hasegawa International Scholarship Foundation are gratefully acknowledged.
Appears in Collections
Discussion papers / Graduate School of Economics, Hitotsubashi University
URL
https://hdl.handle.net/10086/31112