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GTAP Resource #6305

"Alternative border-carbon-adjustment mechanisms in the European Union and responses: aggregate and within-coalition results"
by Clora, Francesco, Wusheng Yu and Erwin Corong

The European Union (EU) plans to reduce by 2030 its greenhouse gas (GHG) emissions by 55%, compared to 1990, increasing its ambition compared to its previous climate goals. At the same time, many countries do not have clearly defined decarbonization goals. The imbalances in climate change mitigation ambitions across regions potentially generate carbon leakage. Border carbon adjustment (BCA) mechanisms have been proposed by many researchers to limit carbon leakage. The European Commission is evaluating whether to implement a BCA by the end of 2023, in connection with its European Green Deal proposal. Depending on its design, the EU BCA will have different impacts not only on trade between the EU and the rest of the world, but also within the EU. Alternative EU BCA designs will also impact the international reactions to it. For example, retaliation is often mentioned as a potential drawback of BCAs. In this study, we use a recursive dynamic computable general equilibrium (CGE) model to evaluate how two alternative EU BCAs and three reactions from non-EU trade partners affect emissions, output and trade flows. We present results for EU and non-EU aggregates, and for eight EU countries/regions.

Resource Details (Export Citation) GTAP Keywords
Category: 2021 Conference Paper
Status: Not published
By/In: Presented during the 24th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2021
Created: Clora, F. (4/15/2021)
Updated: Clora, F. (4/15/2021)
Visits: 1,385
- Climate change policy
- Trade and the environment
- European Union

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