Border Carbon Adjustments

The document examines the challenges of implementing border carbon adjustments (BCAs), focusing on the need for international cooperation to standardize embedded emissions calculations, determine geographical exemptions, establish credits for foreign climate policies, and decide on the use of revenues. It evaluates various multilateral, regional, and bilateral venues for these discussions, noting that while the WTO is a primary site of tension, substantial multilateral progress is currently lacking.

• The lack of an agreed international standard for calculating carbon embedded in goods creates a significant administrative burden for exporters, as different jurisdictions may establish divergent standards.
• There is a tension between the environmental goal of BCAs and the principles of equity for developing countries, suggesting that the least developed countries could be a category for potential exemptions.
• Crediting foreign climate policies is conceptually simple for explicit carbon prices but complex for non-price-based policies, such as forest preservation, which may conflict with the Paris Agreement's principle of sovereign choice.
• The use of BCA revenues is a point of contention; keeping revenues for domestic industry decarbonization is difficult to justify, while alternatives include refunding exporters or funding the UNFCCC’s Green Climate Fund.
• Bilateral discussions, such as those between the EU and the US or EU and India, may produce results more quickly but risk excluding the interests of a wider range of affected trading partners.

APA

Baršauskaitė, I., & Tipping, A. (2023). Border Carbon Adjustments. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-08/border-carbon-adjustments-international-cooperation.pdf

Chicago

Baršauskaitė, Ieva, and Alice Tipping. Border Carbon Adjustments. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-08/border-carbon-adjustments-international-cooperation.pdf.

Wikipedia

{{cite report |last1=Baršauskaitė |first1=Ieva |last2=Tipping |first2=Alice |title=Border Carbon Adjustments |publisher=International Institute for Sustainable Development |date=1 August 2023 |url=https://www.iisd.org/system/files/2023-08/border-carbon-adjustments-international-cooperation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{barauskait2023border, author = {Baršauskaitė, Ieva and Tipping, Alice}, title = {{Border Carbon Adjustments}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = aug, url = {https://www.iisd.org/system/files/2023-08/border-carbon-adjustments-international-cooperation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }