Oxford Review of Economic Policy volume 28, issue 2, P368-394 2012 DOI: 10.1093/oxrep/grs013 View full text
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D. Helm, C. Hepburn, G. Ruta

Abstract: The lack of real progress at the Durban climate change conference in 2011postponing effective action until at least 2020-has many causes, one of which is the failure to address trade issues and in particular carbon leakage. This paper advances two arguments. First, it argues that the conventional view of Border Carbon Adjustments (BCAs) as a "dirty" trade barrier should be turned on its head. Rather, the absence of a carbon price comprises an implicit subsidy to dirtier production in non-regulated markets. Sec…

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