Border carbon adjustment: Not a very promising climate policy instrument

Border carbon adjustment: Not a very promising climate policy instrument / Weitzel, Matthias; Peterson, Sonja. Kiel policy brief, Institut für Weltwirtschaft an der Universität Kiel, October 2012, 10 p. (Kiel policy brief n° 55)

http://mercury.ethz.ch/serviceengine/Files/ISN/154295/ipublicationdocument_singledocument/a2e9ac3b-b9fb-41cb-894a-4caf9d175170/en/KPB_55.pdf

This publication analyzes border carbon adjustments (BCA) as a measure to reduce the negative impacts on competitiveness and to induce lower leakage rates. BCAs would require foreign producers importing into a country with carbon pricing to either buy carbon allowances or to pay a price for the embodied CO2 emissions at the border. However, given the limited efficiency gains and leakage reduction, the authors do not consider BCAs as an instrument of choice in international climate policy. (©  Kiel Institute for the World Economy)


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