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The case for a Carbon Border Adjustment: Where do economists stand?

Alienor Cameron and Marc Baudry ()

No 2022-1, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: On 14 July 2021, the European Commission formally adopted a proposal for a Carbon Border Adjustment Mechanism to mitigate the risk of carbon leakage caused by its increasingly ambitious environmental policies. There is a gap between the ways in which this issue is discussed in political spheres and the evidence provided by economic literature on it. The aim of this paper is to bridge this gap by presenting the context and policy debate surrounding carbon leakage and CBAs in the EU, reviewing the state of the economic literature on this topic, and discussing further research that is necessary to answer remaining policy concerns and unresolved research questions.

Keywords: climate policy; carbon border adjustment; carbon leakage (search for similar items in EconPapers)
JEL-codes: H23 L51 O33 Q58 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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