How WTO-Consistent Tools can Ensure the Decarbonization of Emission-Intensive Industrial Sectors

Galiffa, Chiara; Bercero, Ignacio Garcia

doi:10.1017/aju.2022.32

Cited by 6 publications

(3 citation statements)

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“…Some studies have suggested that border carbon adjustment policy should be accompanied by a compensatory fund transfer aimed at financing the adoption of green technologies, especially in low-income countries. This can incentivize low-income countries to join the climate coalition ( [17], [22]). Some alternative measures to unilateral climate policies have been also suggested by Galiffa et al [22] like firstly, agreement on common decarbonization targets and giving individual countries the independence to decide the pathway to achieve it, secondly, a universal consensus on the product coverage and setting up common methods for calculating the embedded emission in the manufactured products, thirdly, enhancing the role of multilateral institutions to facilitate the implementation of climate policies and examining its compatibility with the World Trade Organization (WTO) framework.…”

Section: Existing Studiesmentioning

confidence: 99%

Impact of the EU’s Carbon Border Adjustment Tax on India and other trading partners of EU

Majumder,

Mathur,

Pohit

2024

GLCE

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The European Union (EU) recently introduced the Carbon Border Adjustment Mechanism (CBAM) with the intention to impose a pricing mechanism on carbon emissions, originating during the production process of emission-intensive products, imported by EU from its non-EU trading partners. However, CBAM is facing a lot of criticism ̶ as an unfair, protectionist measure that threatens the principles of multilateral trading system and has a disproportionately biased impact on the overall welfare of the low-income developing countries. In this context, the paper empirically examines the impact of the European Union’s Carbon Border Adjustment Mechanism on its trading partners by using the CGE GTAP-E model. The impact has been assessed across three pathways – export sales of the trading partners, the emission intensity of the products, and the overall impact on the welfare of the European Union’s (EU’s) trading partners using the GTAP 11 database. The impact varies across countries and sectors. The model estimates indicate that due to the imposition of CBAM, countries with existing domestic carbon pricing mechanism experience marginal increase in welfare with the UK being an exception. Contrastingly, countries with no carbon pricing mechanism will experience a decrease in overall welfare. Countries with a higher share of the EU in their total export basket are affected in terms of their export sales. India’s cement sector export is affected the most due to the imposition of CBAM. However, India’s total amount of exports of cement to the EU’s market is negligible. India’s export of iron and steel to the EU constitutes a larger share but the impact of CBAM is found to be negligible on the same.

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Section: Existing Studiesmentioning

confidence: 99%

Impact of the EU’s Carbon Border Adjustment Tax on India and other trading partners of EU

Majumder,

Mathur,

Pohit

2024

GLCE

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“…In contrast, other studies suggest that the CBAM proposal complies with World Trade Organization (WTO) rules, particularly the principle of non-discrimination, and can work as a complementary tool to attain climate neutrality (Galiffa and Bercero, 2022). Similarly, the former leader of the World Trade Organization has characterised trade rules as a guide to adhere to, rather than a hindrance, when creating a carbon border adjustment (Muller et al, 2021).…”

Section: Carbon Border Adjustment Mechanism's General Impact On Inter...mentioning

confidence: 99%

The potential impact of EU’s carbon border adjustment mechanism (CBAM): an Australia-China relationship perspective

Shi,

Laurenceson,

Liu

2024

JCEFTS

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Purpose This paper aims to investigate the multifaced aspects and consequences of the EU Carbon Border Adjustment Mechanism (CBAM) from an Australia-China Relationship perspective. Design/methodology/approach This paper leverages the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to examine both the internal and external factors that affect Australia and China in the context of the CBAM. In addition, we employ the PEST (Political, Economic, Social and Technological) framework to identify effective strategies for Australia-China cooperation following the implementation of the CBAM. Findings Our analysis reveals numerous mutual interests and opportunities for bilateral collaboration, despite challenges and threats, positioning the CBAM as a potentially significant catalyst for joint initiatives. Practical implications This paper proposes 10 potential areas for Australia and China cooperation from the political economic social and technological PEST dimensions. Originality/value This paper makes a pioneering attempt to explore potential strategies, both individually, and together, that Australia and China can adopt to manage the impact and consequence of CBAM.

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“…' The enthusiasm of European policymakers for the CBAM was met with criticism by Brazil, China, India, and South Africa, the EU's largest trade partners, over the introduction of 'trade barriers' [14]. Despite these allegations, legal scholarship emphasizes that border adjustments are consistent with existing World Trade Organization (WTO) jurisprudence on policy-justified trade measures and do not, by design, violate non-discrimination provisions in trade agreements [15,16]. Apart from legal considerations, structural differences across carbon-intensive, trade-exposed sectors [17][18][19] as well as international economic and geopolitical challenges resulting from the introduction of a carbon border tax [20,21] will determine the political feasibility of the CBAM policy.…”

Section: Introductionmentioning

confidence: 99%

Distributional consequences shape public support for the EU carbon border adjustment mechanism: evidence from four European countries

Bayer,

Schaffer

2024

Environ. Res. Lett.

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A carbon border adjustment mechanism (CBAM) is a policy that increases the cost of carbon-intensive imports from countries with no or weak national carbon regulation. Proponents advocate that it helps avoid industrial relocation and protects jobs in the importing country; its critics say that it impedes free trade and drives up prices. Despite European Union legislation to introduce a CBAM policy, we find that citizens in our samples across four European countries---Germany (n=3,500), Hungary (n=2,512), Switzerland (n=2,500), and the United Kingdom (n=2,500)---have not formed clear opinions about the policy yet. Results from survey experiments, conducted over the course of 1.5~years, show a strong dislike for price increases associated with a carbon border tax, while the prospect of job protection does little to increase CBAM support---not even among subgroups most affected by import competition. However, employment effects become relevant when we prompt survey respondents to assess the effects of the carbon border tax for their country as a whole instead of for themselves as individuals. Consistent with exploratory findings that right-leaning voters express a much stronger opposition to the CBAM policy, our results speak to growing evidence of the politically polarizing nature of costly, green policies when citizens have not formed clear opinions about a policy yet.

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How WTO-Consistent Tools can Ensure the Decarbonization of Emission-Intensive Industrial Sectors

Cited by 6 publications

References 0 publications

Impact of the EU’s Carbon Border Adjustment Tax on India and other trading partners of EU

Impact of the EU’s Carbon Border Adjustment Tax on India and other trading partners of EU

The potential impact of EU’s carbon border adjustment mechanism (CBAM): an Australia-China relationship perspective

Distributional consequences shape public support for the EU carbon border adjustment mechanism: evidence from four European countries

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