Border Carbon Adjustments in the EU: Issues and Options

ERCST, Roundtable on Climate Change and Sustainable Transition, 2020

70 Pages Posted: 19 Nov 2020

See all articles by Andrei Marcu

Andrei Marcu

Centre for European Policy Studies (CEPS)

Michael Mehling

Massachusetts Institute of Technology (MIT)

Aaron Cosbey

International Institute for Sustainable Development (IISD)

Date Written: October 1, 2020

Abstract

As part of the European Green Deal (EGD), the European Commission is currently elaborating a legislative proposal for a Carbon Border Adjustment Mechanism (CBAM) to prevent greenhouse gas emissions leakage and level the playing field between European and foreign emitters. This report brings together the main takeaways from the project ‘Border Carbon Adjustments (BCAs) in the EU: Issues and Options’ launched in November 2019 to provide analytical input and foster an informed debate with domestic and international stakeholders as the CBAM file progresses through the early stages of the legislative process.

Drawing on extensive feedback obtained in a series of stakeholder consultations, the report offers a detailed analysis of the building blocks of BCAs as a policy option in the European context, discusses alternative policy options, and considers different combinations of policy instruments to achieve the desired outcomes.

Keywords: Border Carbon Adjustment, ETS, CBAM, BCA, Climate, Competitiveness, Leakage

JEL Classification: Q50, Q54, F13, F18, F64

Suggested Citation

Marcu, Andrei and Mehling, Michael and Cosbey, Aaron, Border Carbon Adjustments in the EU: Issues and Options (October 1, 2020). ERCST, Roundtable on Climate Change and Sustainable Transition, 2020, Available at SSRN: https://ssrn.com/abstract=3703387

Andrei Marcu

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres, 1000
Brussels, 1000
Belgium

Michael Mehling

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Aaron Cosbey (Contact Author)

International Institute for Sustainable Development (IISD) ( email )

161 Portage Avenue East, 6th Floor
Winnipeg
Manitoba, R3B 0Y4, Manitoba
Canada

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