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Impact of Border Carbon Adjustments on Agricultural Emissions – Can Tariffs Reduce Carbon Leakage?

Author

Listed:
  • Nordin, Ida
  • Wilhelmsson, Fredrik
  • Jansson, Torbjörn
  • Fellmann, Thomas
  • Barreiro-Hurle, Jesús
  • Himics, Mihaly

Abstract

There is concern that unilateral climate action in the EU agricultural sector may cause higher emissions abroad (i.e. emission leakage) and harm the competitiveness of the EU´s agricultural sector. Applying the CAPRI model, this paper assesses the potential for border carbon adjustments (BCA) in the form of import tariffs to limit the leakage of emissions and preserve the competitiveness of the EU agricultural sector. Our results show that even though BCA reduces emission leakage, 92 % of the emission reduction in the EU is still offset by emission increases outside the EU. What limits the effectiveness of the investigated BCA measures is that these measures are unilateral, and thus they only adjust for the reduced competitiveness at the EU internal market, whereas EU exports are still largely replaced by commodities produced in less GHG-efficient countries. Therefore, BCA alone cannot solve the high risk of emission leakage in the agri-food sector as a consequence of unilateral EU climate action.

Suggested Citation

  • Nordin, Ida & Wilhelmsson, Fredrik & Jansson, Torbjörn & Fellmann, Thomas & Barreiro-Hurle, Jesús & Himics, Mihaly, 2019. "Impact of Border Carbon Adjustments on Agricultural Emissions – Can Tariffs Reduce Carbon Leakage?," 172nd EAAE Seminar, May 28-29, 2019, Brussels, Belgium 290209, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa172:290209
    DOI: 10.22004/ag.econ.290209
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    Cited by:

    1. Yu, Wusheng & Clora, Francesco & Costa, Louis & Baudry, Gino, 2021. "Dietary Transitions As Climate Mitigation Measures in Europe: Implications of Supply-Side Responses and Trade Policy Regimes," 2021 Conference, August 17-31, 2021, Virtual 315912, International Association of Agricultural Economists.

    More about this item

    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; International Relations/Trade;
    All these keywords.

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