 Impacts of border carbon adjustments on the Canadian economyHossein Jebeli, Y.-H. Henry Chen, Craig Johnston, Sergey Paltsev and Marie-Christine Tremblay Energy Economics, 2025, vol. 141, issue C Abstract: This paper examines how border carbon adjustments (BCAs) may address the consequences of uncoordinated global climate action, focusing on the economic impacts for Canada. We investigate these impacts under different BCA design features and by considering a coalition of countries and regions that adopt BCAs. We find that when Canada is within a coalition of BCA-implementing countries including the United States, BCA measures in the form of import tariffs reduce Canada's carbon leakage and boost domestic and foreign competitiveness. We show that these results may change if Canada imposes BCAs on a different set of sectors than the rest of the coalition or includes export rebates and free emissions allowances to firms. When Canada remains in the coalition while the United States does not, we show that Canada's carbon leakage increases, domestic competitiveness weakens, and foreign competitiveness improves. Keywords: Climate change; International topics; Trade integration; Carbon emissions; Border adjustment mechanisms (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:141:y:2025:i:c:s0140988324007989 DOI: 10.1016/j.eneco.2024.108089 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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