Economics

Carbon tax competitiveness concerns: Assessing a best practices carbon credit

Document Type

Article

Abstract

This paper considers how industry focused revenue rebating could be used to address competitiveness concerns arising from a unilaterally imposed carbon tax. It focuses on the use of output-based carbon credits tied to best practices in the sector and considers its efficiency and administrative characteristics. It also investigates whether firms have sufficient tax appetite to use such a credit. Such a credit for firms in energy intensive, trade exposed (EITE) sectors could provide compensation for firms and mitigate to some extent competitiveness issues. Some firms, however, would not be able to utilize all of their carbon credits due to insufficient tax appetite.

Publication Title

National Tax Journal

Publication Date

6-2017

Volume

70

Issue

2

First Page

447

Last Page

468

ISSN

0028-0283

DOI

10.17310/ntj.2017.2.08

Keywords

carbon tax, leakage, tax reform, trade competitiveness

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