Séminaire d'Isabelle MÉJEAN

Séminaire d'Isabelle MÉJEAN

Le 11 juin 2024

Le prochain séminaire du GAINS aura lieu le 11 juin 2024 de 10h30 à 12h00 en salle T204.

Isabelle MÉJEAN (Sciences Po) présentera "Carbon Border Adjustments at the Extensive Margin", co-écrit avec P. Coster et J. di Giovanni.

Abstract:

A prevailing consensus among economists asserts that establishing a sufficiently high carbon price serves as a fundamental pillar for tackling climate change, and that this pricing should be implemented on a global scale to prevent carbon leakage. In this paper, we model firms' import decisions of dirty and clean intermediate inputs, and ask how those decisions are altered by carbon price policies. We first use a triple difference strategy to show that French firms' propensity to import dirty inputs from outside of the EU has increased in the 2010s, when ETS was getting more binding. Second, we develop a model of import sourcing displaying clean and dirty inputs, origin-specific fixed costs of importing and country-specific carbon policies. The model is estimated on pre-ETS data. We then use the estimated model to run counterfactuals mimicking the current ETS system, covering production in the European Union, and an ETS system augmented with a carbon border adjustment that expands carbon taxation to non-European productions. We show that the unilateral policy can reproduce the level of carbon leakage observed in the data while CBAM neutralize this source of carbon leakage.