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4108. Asymmetric Emission Regulations and Interventions of The Local Government
Invited abstract in session WB-24: Carbon Regulation, stream Sustainable Supply Chains.
Wednesday, 10:30-12:00Room: 83 (building: 116)
Authors (first author is the speaker)
| 1. | Taha Yasin Gürlesin
|
| Industrial Engineering, Middle East Technical University | |
| 2. | Özgen Karaer
|
| Industrial Engineering, Middle East Technical University | |
| 3. | Z. Pelin Bayindir
|
| Department of Industrial Engineering, Middle East Technical University |
Abstract
Carbon border adjustment can be described as a taxing mechanism where a carbon-regulated market taxes materials imported from unregulated regions. In this study, we analyze how a manufacturer exporting to two regions—one developed (and regulated) and one developing (and unregulated)— responds to CBAM imposed by the developed region. We study two models. The first is a base model in which the manufacturer sets prices for both regions. In the CBAM model, the manufacturer considers investing in green technology to reduce its unit emission and then sets prices for both regions, taking into account the carbon border tax. We also consider a local government that may offer incentives to the manufacturer to invest in green technology at the initial stage. We find that under some market conditions, neither the government’s subsidy nor the carbon border tax causes a reduction in unit emission level.
Keywords
- Game Theory
- Sustainable Development
Status: accepted
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