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Assistant Professor of Economics Darshana Udayanganie is one of the faculty members examining whether national attempts at combined trade and environmental policies might provide a key strategy in fighting climate change.
Edward and Virginia Van Dalson Professor of Economics Patrik Hultberg faculty members is one of the faculty members examining whether national attempts at combined trade and environmental policies might provide a key strategy in fighting climate change.
With much of the world debating how to reverse climate change during a sweltering summer, two Kalamazoo College faculty members are examining whether national attempts at combined trade and environmental policies might provide a key strategy.
The analysis by Patrik Hultberg, K’s Edward and Virginia Van Dalson Professor of Economics; and Darshana Udayanganie, a K assistant professor of economics, will be published soon in the Journal of Environmental Economics and Policy. Among their findings, it will note that Europe and the U.S. are talking about adopting border-adjustment taxes by 2026, targeted toward influencing foreign countries’ carbon emissions.
Hultberg and Udayanganie suggest those taxes could be options because the world’s environmental-policy deals—such as the Paris Agreement, the Kyoto Protocol and the Montreal Protocol—seem to have shortcomings.
“The best thing would be for countries to work together and come up with those international agreements,” Hultberg said. “But countries have an incentive to violate those agreements. One might think, if other countries change their behavior, maybe I don’t have to change mine. In addition, environmental-policy authority does not reach into foreign countries.”
As a result, Udayanganie said one alternative to environmental policies would be to calculate the amount of carbon content a good’s production creates to add a tax, imposed on the producing nation, that thereby increases the product’s global price, incentivizing actions that benefit the environment. That’s the idea behind Europe and the U.S. exploring border-adjustment taxes.
“When we just use stricter environmental policies, some of these firms could simply go to another country,” she said. “That means the pollution being created is not going to be reduced; it will just be produced somewhere else. Such border-adjustment taxes might encourage nations to adjust their environmental policies to avoid the environmen …