Border Carbon Adjustments Based on Avoided Emissions: Addressing the Challenge of Its Design
Paola Rocchi,
Mònica Serrano (),
Jordi Roca and
Iñaki Arto
Ecological Economics, 2018, vol. 145, issue C, 126-136
Abstract:
Carbon pricing is an essential instrument to address climate change. However international differences in carbon control policies may cause not only carbon leakage but also competitiveness disadvantages. In this context, border carbon adjustments are a promising tool for discouraging these problems. But designing a real-world border carbon adjustment instrument implies to consider significant issues: technical feasibility, data availability, the risk of retaliation from developing countries, and its compatibility within the World Trade Organization legal framework. There are still no conclusive answers about a proper design. This paper is an attempt to address the above-mentioned challenges proposing a carbon border tax (CBT) based on avoided emissions. Such a CBT is applied at a product level and not at a sector level, and all international prices are deflated to guarantee that import ‘like’ goods received a treatment similar to ‘like’ domestic products. Using the WIOD, we simulate a CBT based on avoided emissions applied by the European Union, and we compare the results with a CBT based on embodied emissions.
Keywords: Carbon Border Tax; Avoided Emissions; Climate Change; Global Public Good; European Union; GHG Emissions (search for similar items in EconPapers)
JEL-codes: F13 H23 Q54 Q56 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (17)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921800917300903
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:145:y:2018:i:c:p:126-136
DOI: 10.1016/j.ecolecon.2017.08.003
Access Statistics for this article
Ecological Economics is currently edited by C. J. Cleveland
More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().