Enabling Climate Ambition: Border carbon adjustment in Canada and abroad

The document argues that Canada needs to design a border carbon adjustment (BCA) mechanism to prevent emissions from being transferred to unregulated foreign competitors as its carbon price is legislated to rise to CAD 170/tonne by 2030. It notes that while the EU will implement a BCA (CBAM) by 2023, and the US and UK intend to do the same, such systems are complex, politically sensitive, and potentially conflict with trade rules. The report provides recommendations on eight design elements for a Canadian BCA and examines how Canada should respond to the schemes of its major trading partners.

• Canada faces a risk of carbon leakage in sectors such as steel, cement, fertilizers, and chemicals if other countries do not implement similar climate actions, as emissions may be transferred to unregulated foreign competitors.
• There is an urgent need for Canada to design protections for energy-intensive trade-exposed sectors because the domestic carbon price is legislated to reach CAD 170/tonne by 2030.
• Implementing a BCA is challenging because it is complex, politically volatile, and may be illegal under existing trade rules, requiring specific adaptation to Canada's pricing regime.

APA

Stiebert,, A. C. B. (2021). Enabling Climate Ambition: Border carbon adjustment in Canada and abroad. International Institute for Sustainable Development. https://www.iisd.org/publications/enabling-climate-ambition-border-carbon-adjustment-canada

Chicago

Stiebert,, Aaron Cosbey,Michael Bernstein,Seton. Enabling Climate Ambition: Border carbon adjustment in Canada and abroad. International Institute for Sustainable Development, 2021. https://www.iisd.org/publications/enabling-climate-ambition-border-carbon-adjustment-canada.

Wikipedia

{{cite report |last1=Stiebert, |first1=Aaron Cosbey,Michael Bernstein,Seton |title=Enabling Climate Ambition: Border carbon adjustment in Canada and abroad |publisher=International Institute for Sustainable Development |date=12 July 2021 |url=https://www.iisd.org/publications/enabling-climate-ambition-border-carbon-adjustment-canada |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stiebert2021enabling, author = {Stiebert,, Aaron Cosbey,Michael Bernstein,Seton}, title = {{Enabling Climate Ambition: Border carbon adjustment in Canada and abroad}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/publications/enabling-climate-ambition-border-carbon-adjustment-canada}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }