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International Tax and Public Finance

, Volume 12, Issue 5, pp 627–637 | Cite as

Export Competition and the Remission of Domestic Environmental Taxes

  • Steve Mccorriston
  • Ian Sheldon
Article

Abstract

We consider the use of border adjustments to compensate exporters for domestic environmental taxes imposed on an intermediate good. A model of successive oligopoly is used to consider the appropriate border adjustments. In this set-up, the relative importance of the forward incidence of the environmental tax and the backward incidence of the remission play a key role. The results highlight that the simple rule employed by GATT/WTO to set the export remittance equal to the level of the environmental tax is likely to be inappropriate.

Keywords

environmental taxes border adjustments imperfect competition 

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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.School of Business and EconomicsUniversity of ExeterExeterUK
  2. 2.Department of Agricultural, Environmental, and Development EconomicsThe Ohio State UniversityColumbusUSA

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