"The Role of Border Carbon Adjustment in Unilateral Climate Policy: Insights from a Model-Comparison Study—Summary"
In the absence of an effective global agreement to reduce carbon emissions, some industrialized countries have taken unilateral action to reduce emissions. However, unilateral carbon policy can lead to leakage of carbon emissions and precludes abating emissions where such abatement would be least expensive (possibly in other countries). Border carbon adjustment (BCA) is one policy option to mitigate these two disadvantages of unilateral action, but the effectiveness of these measures remains unclear. Comparing the results of simulated carbon policy and BCA in multiple computable general equilibrium (CGE) models of the global economy offers several estimates of the effectiveness of BCA.
This discussion paper explores the potential adverse impacts of unilateral climate policies on domestic energy-intensive and trade-exposed industries.
"The Role of Border Carbon Adjustment in Unilateral Climate Policy: Insights from a Model-Comparison Study"
A new Harvard-Project Discussion Paper examines the relationships between domestic climate policy and trade. The study compares the output of a range of economic models, using the methodology of the Energy Modeling Forum (EMF).