Abstract
This paper investigates the effect of carbon tariffs on global emission control. We propose a global supply chain model consisting of a retailer in an emission-regulated country and supplier in a non-emission-regulated country. The equilibrium solutions are obtained, and the effects of a carbon tariff on global emission control are studied. Through analytical study and numerical study, we find that a carbon tariff does not necessarily reduce global emissions under certain circumstances. The paper discusses insights and the carbon tariff policy implications from this finding.
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