Border Carbon Adjustments have been discussed for many years. However they are now receiving renewed political impetus. This is especially so in Europe, as the new head of the European Commission has asked for proposals on BCAs to be developed.
A new report, of which I am the principal author, looks at the design issues raised by BCAs, their advantages, and the potential difficulties with their implementation.
It covers a range of issues, some of which have received limited discussion to date, including:
- The different ways of implementing BCAs – tariffs, different types of allowances, and relationship to consumption taxes
- Dealing with imports from jurisdictions with their own carbon pricing
- Phasing in of BCAs
- Use of different benchmarks for different purposes (BCAs vs. free allocation)
The report, including a summary table of the issues that need to be addressed, can be found here:
Adam Whitmore – 4th December 2019