Exposure Of Chinese Exports To Potential Border Carbon Adjustments

The document assesses how different BCA designs—specifically direct versus life-cycle emissions and varying carbon prices—would affect Chinese exports. It finds that while certain sectors like iron and steel are highly exposed, the overall economic impact on China's total exports would be limited, potentially reducing the incentive for exporters to lower emissions rather than divert trade.

• The level of emissions captured by BCAs depends heavily on the chosen scope; life-cycle emissions capture a significantly larger portion of total exported emissions (5.1 per cent) compared to direct emissions (1.5 per cent).
• Estimated total charges on Chinese exports vary based on the carbon price and scope: at $20/tCO2, costs range from $0.3 billion (U.S. direct emissions only) to $3.5 billion (both U.S. and EU life-cycle emissions).
• The Iron and Steel sector is the most exposed to BCAs in both the EU and U.S., with ad valorem tax equivalents reaching 18.9 per cent for the EU and 9.4 per cent for the U.S. under a life-cycle approach at $20/tCO2.
• In the EU market, while iron and steel are primary targets for direct emissions charges, the manufacture of leather products attracts the highest charges when calculated on a life-cycle basis due to high export volumes.
• The overall impact of BCAs on incentivizing emission reductions in China is likely limited because the value of exports captured is relatively small—approximately 6 per cent of total Chinese exports—which may lead exporters to divert production to other destinations.
• Using multi-region input-output tables for economy-wide BCA design is problematic due to infrequent data updates (every five years) and a loss of detail at the subsector level.

APA

Wei, Q., Kitson, L., & Wooders, P. (2011). Exposure Of Chinese Exports To Potential Border Carbon Adjustments. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/tri_cc_exposure_chinese_exports.pdf

Chicago

Wei, Qiu, Lucy Kitson, and Peter Wooders. Exposure Of Chinese Exports To Potential Border Carbon Adjustments. International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/tri_cc_exposure_chinese_exports.pdf.

Wikipedia

{{cite report |last1=Wei |first1=Qiu |last2=Kitson |first2=Lucy |last3=Wooders |first3=Peter |title=Exposure Of Chinese Exports To Potential Border Carbon Adjustments |publisher=International Institute for Sustainable Development |date=July 2011 |url=https://www.iisd.org/system/files/publications/tri_cc_exposure_chinese_exports.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wei2011exposure, author = {Wei, Qiu and Kitson, Lucy and Wooders, Peter}, title = {{Exposure Of Chinese Exports To Potential Border Carbon Adjustments}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = jul, url = {https://www.iisd.org/system/files/publications/tri_cc_exposure_chinese_exports.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }