IDEAS home Printed from https://ideas.repec.org/p/erg/wpaper/1500.html
   My bibliography  Save this paper

Potential Effects of the EU’s Carbon Border Adjustment Mechanism on the Turkish Economy

Author

Listed:
  • Sevil Acar

    (Bogaziçi University Hisar Campus Sariyer Istanbu)

  • Ahmet Atil Asici

    (Istanbul Technical University)

  • A. Erinç Yeldan

    (Kadir Has University)

Abstract

In December 2019, the European Union (EU) announced the European Green Deal (EGD) to create a climate-neutral continent by 2050. Accordingly, the EU Emission Trading System (ETS) will be revised to maintain economic growth against possible losses in competitiveness, leading to “carbon leakage.” The Carbon Border Adjustment (CBA) is one of the mechanisms proposed to tackle the carbon leakage problem; it is an import fee levied by the carbon-taxing region (in this case, the EU) on goods manufactured in non-carbon-taxing countries (in this case, Turkey). The purpose of this paper is to provide a first-order estimate of the potential sectoral impacts of the CBA on the Turkish economy by employing input-output methodology. Our results suggest that the CBA may bring a carbon bill of EUR 1.1-1.8 billion to Turkish exporters in the EU market. The revision of the Intended Nationally Determined Contributions (INDC) target and the ratification of the Paris Climate Agreement at the parliament are two steps that can be taken immediately. Speeding up the ongoing preparatory process of instituting an Emission Trading System (ETS) in Turkey (preferably linked to the ETS), will help minimize economic losses.

Suggested Citation

  • Sevil Acar & Ahmet Atil Asici & A. Erinç Yeldan, 2021. "Potential Effects of the EU’s Carbon Border Adjustment Mechanism on the Turkish Economy," Working Papers 1500, Economic Research Forum, revised 20 Oct 2021.
    • Handle: RePEc:erg:wpaper:1500
    as

    Download full text from publisher

    File URL: https://erf.org.eg/publications/potential-effects-of-the-eus-carbon-border-adjustment-mechanism-on-the-turkish-economy-2/
    Download Restriction: no
    File URL: https://bit.ly/3GDlKLz
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Neuhoff,Karsten, 2011. "Climate Policy after Copenhagen," Cambridge Books, Cambridge University Press, number 9781107008939, October.
    2. Helm, Carsten & Schmidt, Robert C., 2015. "Climate cooperation with technology investments and border carbon adjustment," European Economic Review, Elsevier, vol. 75(C), pages 112-130.
    3. Kat, Bora & Paltsev, Sergey & Yuan, Mei, 2018. "Turkish energy sector development and the Paris Agreement goals: A CGE model assessment," Energy Policy, Elsevier, vol. 122(C), pages 84-96.
    4. Acar, Sevil & Yeldan, A. Erinc, 2016. "Environmental impacts of coal subsidies in Turkey: A general equilibrium analysis," Energy Policy, Elsevier, vol. 90(C), pages 1-15.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Selçuklu, Saltuk Buğra & Coit, D.W. & Felder, F.A., 2023. "Electricity generation portfolio planning and policy implications of Turkish power system considering cost, emission, and uncertainty," Energy Policy, Elsevier, vol. 173(C).
    2. Kat, Bora, 2023. "Clean energy transition in the Turkish power sector: A techno-economic analysis with a high-resolution power expansion model," Utilities Policy, Elsevier, vol. 82(C).
    3. Fuzhong Chen & Guohai Jiang & Kangyin Dong, 2022. "How do FDI inflows curvilinearly affect carbon emissions? Threshold effects of energy service availability and cleanliness," Australian Economic Papers, Wiley Blackwell, vol. 61(4), pages 798-824, December.
    4. Ozcan, Mustafa, 2018. "The role of renewables in increasing Turkey's self-sufficiency in electrical energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2629-2639.
    5. Miguel Borrero & Santiago J. Rubio, 2022. "An adaptation-mitigation game: does adaptation promote participation in international environmental agreements?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(3), pages 439-479, September.
    6. Christoph Böhringer & Knut Einar Rosendahl & Halvor Storrøsten, 2021. "Smart hedging against carbon leakage [An overview of the GTAP 9 data base]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(107), pages 439-484.
    7. Melanie Hecht & Wolfgang Peters, 2019. "Border Adjustments Supplementing Nationally Determined Carbon Pricing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 93-109, May.
    8. Bård Harstad, 2016. "The Dynamics Of Climate Agreements," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 719-752, June.
    9. Philipp M. Richter & Marco Runkel & Robert C. Schmidt, 2021. "Strategic Environmental Policy and the Mobility of Firms," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(5), pages 863-893.
    10. Hagen, Achim & Schneider, Jan, 2021. "Trade sanctions and the stability of climate coalitions," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    11. Florian Rey & Thierry Madiès, 2021. "Addressing the concerns about carbon leakage in the implementation of carbon pricing policies: a focus on the issue of competitiveness," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(1), pages 53-75, March.
    12. Zhihua Ding & Caicai Feng & Zhenhua Liu & Guangqiang Wang & Lingyun He & Manzhi Liu, 2017. "Coal price fluctuation mechanism in China based on system dynamics model," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 85(2), pages 1151-1167, January.
    13. Larry Kreiser & Ana Yábar Sterling & Pedro Herrera & Janet E. Milne & Hope Ashiabor (ed.), 2012. "Carbon Pricing, Growth and the Environment," Books, Edward Elgar Publishing, number 15052.
    14. Hagen, Achim & Schopf, Mark, 2024. "Political influence on international climate agreements with border carbon adjustment," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    15. Meléndez-Jiménez, Miguel A. & Polanski, Arnold, 2020. "Dirty neighbors — Pollution in an interlinked world," Energy Economics, Elsevier, vol. 86(C).
    16. Alessandro Tavoni & Ralph Winkler, 2021. "Domestic Pressure and International Climate Cooperation," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 225-243, October.
    17. Henseler, Martin & Maisonnave, Helene, 2018. "Low world oil prices: A chance to reform fuel subsidies and promote public transport? A case study for South Africa," Transportation Research Part A: Policy and Practice, Elsevier, vol. 108(C), pages 45-62.
    18. Shittu, Ibrahim & Abdul Latiff, Abdul Rais & Baharudin, Siti ‘Aisyah, 2024. "Assessing the compensation and reinvestment plans for fuel subsidy rationalization in Nigeria: A dynamic computable general equilibrium approach," Energy, Elsevier, vol. 293(C).
    19. Durmaz, Tunç & Acar, Sevil & Kızılkaya, Simay, 2024. "Generation failures, strategic withholding, and capacity payments in the Turkish electricity market," Energy Policy, Elsevier, vol. 184(C).
    20. Böhringer, Christoph & Rosendahl, Knut Einar & Storrøsten, Halvor Briseid, 2017. "Robust policies to mitigate carbon leakage," Journal of Public Economics, Elsevier, vol. 149(C), pages 35-46.

    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erg:wpaper:1500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sherine Ghoneim (email available below). General contact details of provider: https://edirc.repec.org/data/erfaceg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.