International Institute for Sustainable Development

Institut international du développement durable

A Guide for the Concerned: Guidance on the elaboration and implementation of border carbon adjustment

Aaron Cosbey, Susanne Droege, Carolyn Fischer, Julia Reinaud, John Stephenson, Lutz Weischer, Peter Wooders

When governments take strong unilateral action on climate change, they will always consider border carbon adjustment (BCA) as a means to deal with competitiveness and leakage issues. But while this tool appears straightforward it is plagued by deeply complex problems in practice, including trade law considerations, methodological challenges and consistency with principles such as common but differentiated responsibility. This guidance is the product of a seven-person international expert drafting group that wrestled with those issues and others for over two years. It goes into rare depth on all the issues that policy-makers would need to consider in building and implementing a regime of BCA. It also serves as a benchmark by which targeted exporters can assess such schemes.

Contents include:

Summary of Recommendations

  1. Starting points

    What is BCA?

    Why apply BCA?

    Criteria for judging BCA regime options

  2. Motivations

  3. Scope of applicability


    Identifying goods/sectors to be covered

  4. Determining the level and type of adjustment

    Assessing the carbon content

    Modifications to the adjustment level

    Type of adjustment

    Pricing the carbon content

  5. The application of BCA to exports

  6. Use of revenues from import adjustments

  7. Other design guidance

    Pre-establishment guidance

    Operational guidance

    Sunset guidance

  • Publication type: Paper
  • Publication date: November 21, 2012
  • Page count: 22
  • Publisher: ENTWINED
  • © Copyright 2012 ENTWINED
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