Paper: Carbon taxes could create new winners and losers among countries
Last edited Wed Feb 20, 2019, 05:04 AM - Edit history (1)
https://news.illinois.edu/view/6367/752740Paper: Carbon taxes could create new winners and losers among countries
Feb 19, 2019 9:00 am by Phil Ciciora | Business and law editor | 217-333-2177
CHAMPAIGN, Ill. Although conventional wisdom suggests that poor countries are more likely to bear a disproportionate burden of a worldwide carbon tax on fossil fuels used for electricity and transportation, the potential consequences of such a tax would vary depending on several factors, says new research co-written by a University of Illinois energy and environmental policy expert.
A global carbon tax or mandate would create new sets of economic winners and losers within each group of countries at different levels of per capita income, said Don Fullerton, a Gutgsell Professor of Finance at Illinois and former deputy assistant secretary of the U.S. Treasury Department.
With any sort of worldwide carbon policy, low-income countries are afraid that all the burdens are going to fall on them, Fullerton said. But the consequences are not all that clear-cut. What we find is that there are going to be winners and losers among rich countries, poor countries and middle-income countries.
To be sure, some low-income countries are at a distinct disadvantage. But just because youre a low-income country doesnt automatically mean youre worse off under a carbon policy. It really depends on how much your economy relies on fossil fuels.
https://dx.doi.org/10.1093/reep/rey023