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

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  • Marc Baudry

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Alienor Cameron

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

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.

Suggested Citation

  • Marc Baudry & Alienor Cameron, 2022. "The case for a Carbon Border Adjustment: Where do economists stand?," Working Papers hal-04159819, HAL.
    • Handle: RePEc:hal:wpaper:hal-04159819
    Note: View the original document on HAL open archive server: https://hal.science/hal-04159819
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    Cited by:

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    More about this item

    Keywords

    climate policy; carbon border adjustment; carbon leakage;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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