Eco-tariff
tariff to equalise externality costs
An eco-tariff, also known as an environmental tariff, is a trade barrier for the purpose of reducing pollution and improving the environment. These trade barriers may take the form of import or export taxes on products that have a large carbon footprint or are imported from countries with lax environmental regulations. A carbon tariff is a type of eco-tariff.
International trade vs. environmental degradation
There is debate on the role that increased international trade has played in increasing pollution. While some maintain that increases in pollution which result in both local environmental degradation and a global tragedy of the commons are intimately linked to increases in international trade, others have argued that as citizens become more affluent they'll also advocate for cleaner environments. According to a World Bank paper:Since freer trade raises income, it directly contributes to increasing pollution levels via the scale effect. However, it thereby induces the composition (and) technique effects of increased income, both of which tend to reduce pollution levels.Proponents of environmental tariff implementation have highlighted that if implemented correctly, the tariff could serve to stop strategic behavior of foreign nations and return efficient economic policy in the foreign country. Additionally, environmental standards will be harmonized between the trading nations as a result of the environmental tariff.
One of the major issues that are raised when discussing environmental tariffs, is the issue of a reduction in trade.
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This entry incorporates text from “Eco-tariff” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.