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Export Competition and the Remission of Domestic Environmental Taxes

International Tax and Public Finance volume 12, pages 627–637 (2005)Cite this 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.

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Authors and Affiliations

  1. School of Business and Economics, University of Exeter, Exeter, UK

    Steve Mccorriston

  2. Department of Agricultural, Environmental, and Development Economics, The Ohio State University, Columbus, OH, USA

    Ian Sheldon

Authors
  1. Steve Mccorriston
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  2. Ian Sheldon
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Correspondence to Steve Mccorriston.

Additional information

JEL Code: H87, Q38

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Mccorriston, S., Sheldon, I. Export Competition and the Remission of Domestic Environmental Taxes. Int Tax Public Finan 12, 627–637 (2005). https://doi.org/10.1007/s10797-005-0476-x

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  • DOI: https://doi.org/10.1007/s10797-005-0476-x

Keywords

  • environmental taxes
  • border adjustments
  • imperfect competition