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Designing Effective Carbon Border Adjustment with Minimal Information Requirements. Theory and Empirics

Author

Listed:
  • Campolmi, Alessia

    (University of Verona)

  • Fadinger, Harald

    (University of Mannheim and CEPR)

  • Forlati, Chiara

    (University of Southampton)

  • Stillger, Sabine

    (University of Mannheim)

  • Wagner, Ulrich J.

    (University of Mannheim and ZEW)

Abstract

This paper proposes a Leakage Border Adjustment Mechanism (LBAM) as a mechanism to tackle carbon emissions and avoid leakages. It requires no knowledge of embedded emissions and can be applied to all tradable sectors. It implements import tariffs (and, possibly, export subsidies) that sterilize the changes in imports (and exports) induced by a higher EU carbon price.

Suggested Citation

  • Campolmi, Alessia & Fadinger, Harald & Forlati, Chiara & Stillger, Sabine & Wagner, Ulrich J., 2024. "Designing Effective Carbon Border Adjustment with Minimal Information Requirements. Theory and Empirics," Single Market Economics Papers WP2024/19, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team.
    • Handle: RePEc:bda:wpsmep:wp2024/19
    DOI: 10.2873/336612
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