Competitiveness and Carbon Pricing: Border adjustments for greenhouse policies

by Hugh Saddler, Frank Muller and Clara Cuevas

This paper outlines a radical new proposal to pay rebates to export industries adversely affected by greenhouse gas emission taxes thereby preserving the international competitiveness of energy-intensive exporters whilst maintaining the carbon price signal with the domestic economy. Implementation of the proposal would thus effectively remove the main argument used against the ratification of the Kyoto Protocol, that of damage to our international competitiveness.

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