Is Environmental Tax Harmonization Desirable in Global Value Chains?-Reference-Cited by-同舟云学术

Is Environmental Tax Harmonization Desirable in Global Value Chains?

Published:2020-08-08 Issue:1 Volume:21 Page:379-416
ISSN:1935-1682
Container-title:The B.E. Journal of Economic Analysis & Policy
language:en
Short-container-title:

Author:

Cheng Haitao¹,Kato Hayato²^ORCID,Obashi Ayako³

Affiliation:

1. Graduate School of Economics , Hitotsubashi University , 2-1 Naka , Kunitachi , 186-8601, Tokyo , Japan

2. Graduate School of Economics , Osaka University , 1-7 Machikaneyama , Toyonaka , 560-0043, Osaka , Japan

3. School of International Politics, Economics and Communication , Aoyama Gakuin University , 4-4-25 Shibuya , Shibuya-ku , 150-8366, Tokyo , Japan

Abstract

Abstract 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.

Funder

Japan Society for the Promotion of Science

Hasegawa International Scholarship Foundation

Publisher

Walter de Gruyter GmbH

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics

Link

https://www.degruyter.com/document/doi/10.1515/bejeap-2019-0346/pdf

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