carbon border adjustments
Perdana, S. & Vielle, M. (2023). Carbon border adjustment mechanism in the transition to net-zero emissions: collective implementation and distributional impacts. Environmental Economics and Policy Studies, in press.
As an instrument to minimize carbon leakage, the effects and feasibility of Carbon Border Adjustments Mechanism (CBAM) will depend on multiple design options. While the EU has committed to introducing CBAM as part of its green climate deal, pursuing climate efforts to successfully limit global warming requires a collective implementation involving major emitters China and the US. This paper quantifies the distributional impacts of a joint CBAM implementation of in a climate alliance or a club of the EU, the US, and China.
4. The EU Carbon Border Adjustment Mechanism towards net zero: mitigating adverse impacts on least developed countries
As part of its ongoing efforts towards net zero by 2050, the European Parliament and the Council have reached an agreement on the implementation of the Carbon Border Adjustment Mechanism (CBAM), the EU's landmark tool to put a fair price on the carbon emitted during the production of carbon-intensive goods entering the EU and to encourage cleaner industrial production in non-EU countries. Achieving its updated climate ambition will require substantial and rapid reduction in the current emissions quota.
Perdana, S., & Vielle, M. (2022). Making the EU Carbon Border Adjustment Mechanism acceptable and climate friendly for least developed countries. Energy Policy, 170, 113245.
Implementation of CBAM to support EU climate neutrality by 2050 has raised several concerns. As the mechanism aims to minimise leakage through equal fairness in global mitigation, imposing carbon tariffs on the EU’s imports of energy-intensive goods could curtail the export of EU trading partners. This might be detrimental, especially to the LDCs, due to their high exposures and vulnerability risks. This paper assesses and quantifies the implication of EU-CBAM and analyses eight complementary measures to mitigate the impacts on LDCs.