Border Carbon Ajustment in Europe and Trade Retaliation: What would be the Cost for European Union?
Unilateral climate policy, such as carbon pricing, represents an additional cost to the economy, especially to energy-intensive industrial sectors, as well as those exposed to international competition. A border carbon adjustment (BCA) is often presented as an attractive policy option for countries that wish to go ahead without waiting for a global climate agreement. We used the computable general equilibrium model MIRAGE to simulate the impact of the introduction of a BCA on imports of energy-intensive products in EU and EFTA countries and to evaluate the exports their main trade partners would lose. Given that a BCA is a trade measure, it might cause disputes at the World Trade Organization (WTO). If the BCA is considered illegal, the losses suffered by some partners may justify trade retaliations. At that point, it would be likely that prohibitive retaliatory tariffs target sensitive products in the EU, which are often related to the European agricultural sector. These trade measures would limit the drop in production in the energy-intensive and trade-exposed (EITE) sectors, but at the expense of the other sectors. Nevertheless, neither the BCA nor retaliation would have sizeable impacts on real income or GDP in the EU or on the retaliators, while leading to a small decrease in global emissions.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2016|
|Publication status:||Published in Energy economics, 2016, 54, <10.1016/j.eneco.2015.11.021>|
|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01291370|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Houssein Guimbard & Sébastien Jean & Mondher Mimouni & Xavier Pichot, 2012.
"MAcMap-HS6 2007, an Exhaustive and Consistent Measure of Applied Protection in 2007,"
CEPII research center, issue 130, pages 99-122.
- Houssein Guimbard & Sébastien Jean & Mondher Mimouni & Xavier Pichot, 2012. "MAcMap-HS6 2007, an exhaustive and consistent measure of applied protection in 2007," Working Papers 2012-10, CEPII research center.
- Böhringer, Christoph & Balistreri, Edward J. & Rutherford, Thomas F., 2012. "The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)," Energy Economics, Elsevier, vol. 34(S2), pages 97-110.
- Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2013. "Modelling the world economy at the 2050 horizon," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(4), pages 617-654, October.
- Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2013. "Modelling the world economy at the 2050 horizon," PSE - Labex "OSE-Ouvrir la Science Economique" hal-00975545, HAL.
- Dieter Helm & Cameron Hepburn & Giovanni Ruta, 2012. "Trade, climate change, and the political game theory of border carbon adjustments," Oxford Review of Economic Policy, Oxford University Press, vol. 28(2), pages 368-394, SUMMER.
- Dieter Helm & Cameron Hepburn & Giovanni Ruta, 2012. "Trade, climate change and the political game theory of border carbon adjustments," GRI Working Papers 80, Grantham Research Institute on Climate Change and the Environment.
- Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
- Guillaume Gaulier & Soledad Zignago, 2010. "BACI: International Trade Database at the Product-Level. The 1994-2007 Version," Working Papers 2010-23, CEPII research center.
- Monjon, Stéphanie & Quirion, Philippe, 2010. "How to design a border adjustment for the European Union Emissions Trading System?," Energy Policy, Elsevier, vol. 38(9), pages 5199-5207, September.
- S. Monjon & Philippe Quirion, 2010. "How to design a border adjustment for the European Union Emissions Trading System?," Post-Print hal-00719254, HAL.
- Stéphanie Monjon & Philippe Quirion, 2010. "How to Design a Border Adjustment for the European Union Emissions Trading System?," Working Papers 2010.36, Fondazione Eni Enrico Mattei.
- Lionel Fontagné & Jean Fouré & Maria Priscila Ramos, 2013. "MIRAGE-e: A General Equilibrium Long-term Path of the World Economy," Working Papers 2013-39, CEPII research center.
- Paul Veenendaal & Ton Manders, 2008. "Border tax adjustment and the EU-ETS, a quantitative assessment," CPB Document 171, CPB Netherlands Bureau for Economic Policy Analysis.
- repec:dau:papers:123456789/7940 is not listed on IDEAS
- Löschel, Andreas & Alexeeva-Talebi, Victoria & Mennel, Tim, 2008. "Climate Policy and the Problem of Competitiveness: Border Tax Adjustments or Integrated Emission Trading?," ZEW Discussion Papers 08-061, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- repec:dau:papers:123456789/10122 is not listed on IDEAS
- Bown, Chad P. & Ruta, Michele, 2008. "The economics of permissible WTO retaliation," WTO Staff Working Papers ERSD-2008-04, World Trade Organization (WTO), Economic Research and Statistics Division.
- Yvan Decreux & Hugo Valin, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 2007-15, CEPII research center.
- Decreux, Yvan & Valin, Hugo, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 7284, TRADEAG - Agricultural Trade Agreements.
- repec:zbw:hohpro:346 is not listed on IDEAS
- Stéphanie Monjon & Philippe Quirion, 2011. "A border adjustment for the EU ETS: reconciling WTO rules and capacity to tackle carbon leakage," Climate Policy, Taylor & Francis Journals, vol. 11(5), pages 1212-1225, September.
- Stephanie Monjon & Philippe Quirion, 2011. "A border adjustment for the EU ETS: reconciling WTO rules and capacity to tackle carbon leakage," Post-Print hal-00715462, HAL.
- Kuik, Onno & Hofkes, Marjan, 2010. "Border adjustment for European emissions trading: Competitiveness and carbon leakage," Energy Policy, Elsevier, vol. 38(4), pages 1741-1748, April.
- Peter Holmes & Tom Reilly & Jim Rollo, 2011. "Border carbon adjustments and the potential for protectionism," Climate Policy, Taylor & Francis Journals, vol. 11(2), pages 883-900, March.
- Peter Holmes & Tom Reilly & Jim Rollo, 2010. "Border Carbon Adjustments and the Potential for Protectionism," Working Paper Series 0610, Department of Economics, University of Sussex.
- Rob Dellink & Gregory Briner & Christa Clapp, 2011. "The Copenhagen Accord/Cancún Agreements Emission Pledges For 2020: Exploring Economic And Environmental Impacts," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 53-78.
- Scott Barrett, 2011. "Rethinking Climate Change Governance and Its Relationship to the World Trading System," The World Economy, Wiley Blackwell, vol. 34(11), pages 1863-1882, November.
- Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October. Full references (including those not matched with items on IDEAS)