Carbon border adjustment: a discussion on effectiveness and efficiency

Jodie Keane, Laetitia Pettinotti and Maximiliano Mendez-Parra, December 2020

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If the European Union adopts BCAs unilaterally, this instrument is likely to be ineffective in bringing down global emissions in the most critical sectors. For example, most steel production is for domestic markets. BCAs efficiency is questionable compared to standards, if they do not reflect significant shifts in consumers’ choices. Even if developing countries – with historically low emissions – are excluded from BCAs they may still be affected through knock-on effects on complex supply chains.

Photo:The port in Tema, Ghana. Jonathan Ernst / World Bank. Licence: (CC BY-NC-ND 2.0)