Title data
Korpar, Niko ; Larch, Mario ; Stöllinger, Roman:
The European carbon border adjustment mechanism : a small step in the right direction.
In: International Economics and Economic Policy.
Vol. 20
(2023)
Issue 1
.
- pp. 95-138.
ISSN 1612-4812
DOI: https://doi.org/10.1007/s10368-022-00550-9
Abstract in another language
We estimate the effects of a European Carbon Border Adjustment (CBA) mechanism on exports, real GDP, welfare and emissions using the multi-region, multi-sector structural gravity model of Larch and Wanner (2017). Incorporating the main industries covered in the proposal of the European Commission from mid-2021, as well as its other design features, and assuming prevailing CO2 prices, we find only small effects of the European CBA mechanism. EU exports are estimated to decline by 0.04%, while CO2 emissions in EU countries increase by 0.24%. These negligible results mask larger adjustments at the sectoral level. The structural changes will shift the EU economy towards more emission-intensive industries, which will make achieving its climate goals harder. On the positive side, the European CBA mechanism will reduce global emissions by 0.08%. Given the minute economic costs in terms of GDP and welfare losses, the CBA mechanism seems an appropriate policy tool, though its proposed design will not be able to make a significant contribution to mitigating global climate change.
Further data
Item Type: | Article in a journal |
---|---|
Refereed: | Yes |
Keywords: | Carbon border taxes; Carbon tariffs; Carbon leakage; Climate change |
Institutions of the University: | Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VI: Empirical Economic Research > Chair Economics VI: Empirical Economic Research - Univ.-Prof. Dr. Mario Larch Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VI: Empirical Economic Research |
Result of work at the UBT: | Yes |
DDC Subjects: | 300 Social sciences > 330 Economics |
Date Deposited: | 13 May 2023 21:00 |
Last Modified: | 15 May 2023 05:53 |
URI: | https://eref.uni-bayreuth.de/id/eprint/76434 |