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Beaufils, T., Ward, H., Jakob, M., & Wenz, L. Assessing different European Carbon Border Adjustment implementations and their impacts on trade partners. Nature Communications Earth & Environment. (2023) https://doi.org/10.1038/s43247-023-00788-4 Supporting code and data This repository contains the following folders: - code : contains all Python and iPython scripts used to generate intermediate data and figures - data : contains raw and processed data used for this project. Note that proprietary MRIO data from the EORA database are not included in the repository and should be added manually - figures : contains high-definition figures shown in the manuscript and in the supplementary information - tables : contains tables shown in the supplementary information All results and figures can be reproduced by: 1. Downloading raw EORA (https://worldmrio.com/eora26/) data and placing them in the data/EORA/raw folder. 2. Running the scripts in the code folder in the order specified. All figures can be reproduced by running the ipython scripts starting with 4_. &nbsp

The European Union (EU) recently declared its intention to implement a carbon border adjustment mechanism (CBAM) to address carbon leakage and competitiveness concerns associated with elevated climate ambitions in its Green Deal. Current literature points to uncertainties regarding the CBAM's effectiveness and compatibility with international trade rules. This study numerically evaluates how alternative EU CBAM designs under various international reactions affect global and regional GHG emissions, outputs and trade flows. Our modeling results confirm substantial carbon leakages and output reductions in the EU's emissions-intensive trade-exposed (EITE) sectors when implementing the Green Deal. We find that the design of the CBAM matters: while a “non-discriminatory” CBAM based on the EU's own scope 1 emission intensities fails to effectively reduce leakages, an ‘aggressive’ CBAM based on exporters’ scope 1 & 2 emission intensities can achieve such goal (albeit with potentially high implementation cost). International retaliations by non-EU countries can only partially offset the EU's gains from the ‘aggressive’ CBAM, while their cooperation can result in smaller losses to the EU EITE sectors and lower leakages. Finally, the CBAM cannot change within-EU imbalances in the EITE sectors, as several EU members lose EITE outputs consistently in all scenarios with and without retaliations.

In December 2019, the 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." Carbon border adjustment (CBA) is one of the mechanisms proposed to tackle the carbon leakage problem. In this paper, we provide a first-order estimate of the potential impacts of a possible CBA across production sectors and build a dynamic, multi-sectoral applied general equilibrium (AGE) model to study the overall macroeconomic impact of the EGD on the Turkish economy. Then, we extend our analysis to document the potential benefits of a more active climate policy. The model is in the Walrasian tradition wherein aggregate supply and demand actions are simulated with the interplay of relative prices to bring equilibrium in the markets for goods, for labor, and for foreign exchange. Constructed around 24 production sectors, the model accommodates flexible, multi-level functional forms to link production activities with gaseous emissions, a government entity to maintain taxation, and public expenditures, as well as administration of environmental policy instruments, all within an open-economy macroeconomic environment. Our results suggest that the potential adverse impact of the CBA on the Turkish economy would range between 2.7 and 3.6% loss of the GDP by 2030 over the business-as-(un)usual base path. We also document that under an alternative scenario through which Turkey is modeled as an active agent in the international climate policy arena embedding decarbonization into her official macroeconomic policy agenda, she can achieve a superior pathway for national income and a reduced carbon burden.

The EU steps up its efforts to curb its territorial CO2-emissions. It is planning to introduce a carbon border adjustment mechanism (CBAM) to level the playing field and to raise own resources. However, unilateral European climate policy action, whether shored up with a CBAM or not, can only play a limited role in reducing global CO2-emissions. A U-CBAM cannot stop indirect leakage, it has ambiguous effects on other countries' mitigation efforts, and it poses the risk of conflicts with trade partners.The EU, together with the US and other like-minded countries, should push hard to establish a climate club with a common minimum price of CO2and a common CBAM applied to third countries. Such a framework would incentivize other countries to join while limiting leakage and reducing the risk of trade policy disputes. Die EU verstärkt ihre Bemühungen zur Eindämmung ihrer territorialen CO2-Emissionen. Sie plant die Einführung eines CO2-Grenzausgleichsmechanismus (CBAM), um das Spielfeld zu ebnen und ihre Eigenmittel zu erhöhen. Die Autoren weisen allerdings darauf hin, dass unilaterale europäische klimapolitische Maßnahmen, ob nun mit einem CBAM abgesichert oder nicht, nur eine begrenzte Rolle bei der Reduzierung der globalen CO2-Emissionen spielen können. Ein EU-Grenzausgleich kann das so genannte indirekte Leakage nicht stoppen, er hat unklare Auswirkungen auf die klimapolitischen Anstrengungen anderer Länder und birgt das Risiko von Konflikten mit Handels-partnern. Sie schlagen daher vor, dass die EU zusammen mit den USA und anderen gleichgesinnten Ländern daran arbeiten sollte, einen Klima-Club mit einem gemeinsamen CO2-Mindestpreis und einem gemeinsamen CBAM gegenüber Drittländern zu gründen. Ein solches Rahmenwerk würde Anreize für andere Länder schaffen, sich dem Klub anzuschließen, während es gleichzeitig das Leakage-Risiko begrenzt und das Risiko von handelspolitischen Streitigkeiten verringert.

As part of its ambitious European Green Deal package, at the heart of which stands the commitment to become carbon-neutral by 2050, the European Commission announced that it would propose a "carbon border adjustment mechanism" to address the risk of carbon leakage. This study models the measure in a Computable General Equilibrium framework and analyses how effective it would be in reducing the incidence of carbon leakage. The analysis suggests that even a sectorally limited EU carbon border adjustment would reduce the carbon leakage rate by up to two thirds, making it more effective than the current system of free allocation. Besides environmental benefits, it would also offset competitiveness losses of European energy-intensive industries incurred by a higher EU carbon price and generate additional income for public budgets. At the same time, the analysis shows that around a third of the overall incidence of carbon leakage is driven not by competitiveness but by energy price effects, making it impossible to offset by border measures.

Статья рассматривает текущую практику расширения охвата факторов, учитывающихся при введении торговых барьеров на рынках продукции черной металлургии, на примере использования «экологической повестки» в качестве дополнительного инструмента торгового протекционизма. Оценивается взаимосвязь либерализации международной торговли и глобальной экологической ситуации. Дополнительно рассматривается влияние текущей ситуации в международной торговле черными металлами на достижение цели сокращения мировых выбросов углеводорода, анализируются основные предлагаемые подходы, а также их потенциальное влияние на состояние глобальной экономики., The article focuses on the recent approach of expanding the scope of factors that are taken into account when introducing trade barriers on steel products, with the “environmental agenda” additional protectionism instrument considered as the core example. The correlation between international trade liberalization and global ecological situation is estimated. Besides, the article deals with the impact of current trade in steel products on the achievement of global CO2 emissions reduction goal. The key suggested instruments and their potential influence are analyzed.

Export led growth remains a critical route out of poverty for many least developed countries (LDCs). But in a world increasingly concerned about climate change and the contribution of international trade to global warming will measures being considered to mitigate emissions hurt the export opportunities of LDCs? This paper reviews the trade-related instruments being considered by both policymakers and business communities to mitigate climate change, identifying areas where LDCs may be affected. The paper explores the following key issues: (i) how a shift to low carbon transportation may affect LDC exports given their remote location from main markets; (ii) how LDCs’ exports will be influenced by their own domestic climate measures; (iii) whether mitigation instruments introduced by other governments that result in carbon border tax adjustments will significantly affect LDC exports; (iv) the importance of the nature of liberalization of trade in green goods; (v) how government sustainability standards in overseas market may affect trade, and finally (vi) the potential impact of private measures used by businesses for carbon management. The paper shows how climate change mitigation instruments will create challenges and provide new opportunities for LDC exports that will require attention to traditional trade policy issues but also to a deeper agenda relating to regulatory development and convergence.

The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined with an export rebate to constitute a ‘complete CBA’ (Carbon Border Adjustment) solution. Alternatively, a simple tariff at the border can compensate for differences in carbon prices between domestic and imported products. A consumption-based carbon taxation can al so be contemplated. Last, a uniform tariff on imports from countries not imposing (equivalent) carbon policies may help solving the free-riding problem.

Die Vereinten Nationen stellen fest, dass „der Klimawandel das bestimmende Thema unserer Zeit ist und wir uns in einem entscheidenden Moment befinden". Wissenschaftliche Erkenntnisse unterstützen die Anschauung, dass wir uns inmitten einer Klimakrise befinden, doch das Spektrum der vorgeschlagenen Lösungen ist breit gefächert und reicht von der Einführung einer CO2-Steuer über weitere politische Maßnahmen bis hin zu neuen Arten nachhaltiger Systeme. Der weltweite, effiziente und faire Kampf gegen den Klimawandel ist eine der größten Herausforderungen vor denen die Menschheit je stand. Um die Welt vor dem Klimawandel zu retten ist ein wissenschaftlicher Ansatz unerlässlich. Die vorliegende Arbeit bewertet bestehende österreichische Maßnahmen zur Reduktion der Treibhausgasemissionen. So werden in dieser Arbeit nicht nur die bestehenden Verbrauchsteuern, sondern auch die Umweltsteuern einer rigorosen Analyse unterzogen. Darüber hinaus bietet die Arbeit einen Vergleich der jährlichen Steuereinnahmen im Allgemeinen und der Einnahmen, die Österreich durch die steuerlichen und wirtschaftlichen Umweltmaßnahmen erzielt. Da Österreich mit dem 1. Januar 1995 der EU beigetreten ist, ist es unumgänglich den rechtlichen Rahmen auf Unionsebene sowie auf innerstaatlicher Ebene zu durchleuchten. Nach der Untersuchung der derzeit in Österreich umgesetzten Umweltmaßnahmen wird Kanada als ein internationales Vergleichsland herangezogen. Kanada nimmt weltweit eine Vorreiterrolle in Bezug auf die Bekämpfung des Klimawandels ein. Das ist auf die in den kanadischen Provinzen und Territorien eingeführten Systeme zur Bepreisung von Treibhausgasemissionen, wie beispielsweise die Carbon Tax oder das Cap-and-Trade System, zurückzuführen. Schlussendlich befasst sich die Arbeit mit den neuartigen Entwicklungen auf Unionsebene, die mit dem Europäischen Grünen Deal festgelegt worden sind. Insbesondere wird dabei auf den Vorschlag der Präsidentin der Europäischen Kommission Ursula von der Leyen einer CO2-Grenzausgleichsteuer eingegangen. Die CO2-Grenzausgleichsteuer wird folglich aus Sicht des europäischen Binnenmarkts, der Drittländer sowie der Zollunion erläutert. The United Nations state that “Climate Change is the defining issue of our time and we are at a defining moment.” Scientific evidence supports the notion that we are in the midst of a climate crisis, yet the spectrum of proposed solutions is vast ranging from the introduction of a carbon tax, over other policy measures, to new types of sustainable systems. The worldwide, efficient and fair fight against climate change is one of the greatest challenges that humanity has ever faced. In order to save the world from climate change a scientific approach is essential. This thesis assesses existing Austrian measures implemented to reduce Greenhouse Gas emissions. As such, this work subjects not only the existing excise taxes, but also the environmental taxes to rigorous analysis. Moreover, the thesis provides a comparison of yearly tax revenues in general, and the revenues Austria generates by pricing pollution. Since Austria joined the European Union on January 1st 1995, it is essential to examine the legal framework for environmental and excise taxes on both the intergovernmental and the Union level. After studying the environmental measures currently implemented in Austria, Canada’s system of pricing pollution is presented as an international comparison. Canada is recognized as one of the global leaders in combating climate change. This is due to the Greenhouse Gas pricing systems introduced in the Canadian provinces and territories, such as the Carbon Tax or the Cap-and-Trade system. Finally, this thesis presents the latest developments at the Union level, as a result of the European Green Deal. In particular, the proposal by the President of the European Commission Ursula von der Leyen to potentially introduce a Border Carbon Adjustment Tax is examined. The project is assessed from three different perspectives – the European internal market, third countries and the Custom Union. vorgelegt von: Alina Nöckler Wien, FH Campus Wien, Masterarb., 2020

This article explores the design of Carbon Adjustment Mechanisms based on an analysis of historical data, the existing literature as well as theoretical considerations. In the empirical analysis we quantify territorial emissions as compared to the CO2 footprints for countries within the EU-ETS area and globally, we show which (mostly upstream) industries account for the majority of emissions, and identify how their emissions are imported embedded in final or intermediate products from more downstream industries. In an analysis based on gravity equations, we find evidence for carbon leakage in some emission-intensive industries, but only small overall effects. Based on our own evidence and the current literature, we conclude that - if a Carbon Adjustment Mechanism is to be established - focusing on emissions intensive industries could balance excessive bureaucratic burden and carbon leakage mitigation. To be effective, such a system should also extend to embedded emissions in downstream industries to avoid a shift of imports down the value chain. Concerns with regard to international trade relations could be addressed by not implementing Carbon Adjustment Mechanisms unilaterally, but rather using them as the basis for a cooperative approach to climate protection jointly with the most important trading partners.