If carbon tax is not effective to control CO2 emissions, emission trading (ET) as in Kyoto mechanism will be the other alternative. However, for international ET to be viable, it presupposes that an emitter will purchase emission permit if emitting ab...
If carbon tax is not effective to control CO2 emissions, emission trading (ET) as in Kyoto mechanism will be the other alternative. However, for international ET to be viable, it presupposes that an emitter will purchase emission permit if emitting above its cap, rather than producing energy-intensive goods less domestically and importing abroad instead. Whether a country as a whole does so or not can berevealed by its balance of emissions embodied in trade (BEET). Earlier studies on BEET relied on few selected countries in a partial equilibrium context. This paper is an attempt to examine BEET in a worldwide CGE context and to simulate its sensitiveness to a domestic policy measure such as carbon tax, with a special emphasis on Korea.