A Guide for the Concerned: Guidance on the elaboration and implementation of border carbon adjustment
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.
Summary of Recommendations
What is BCA?
Why apply BCA?
Criteria for judging BCA regime options
Scope of applicability
Identifying goods/sectors to be covered
Determining the level and type of adjustment
Assessing the carbon content
Modifications to the adjustment level
Type of adjustment
Pricing the carbon content
The application of BCA to exports
Use of revenues from import adjustments
Other design guidance
You might also be interested in
Quad and the WTO focus on fishing
Some rare good news in global trade talks, and attempts to tackle an ecological and human rights disaster.
Greening Aid for Trade: Pathways for a just transition to sustainable trade
This policy brief is a summary of ideas on how Aid for Trade can be shaped to better respond to developing countries' interests in more environmentally sustainable production and trade patterns.
It’s Taken More than 20 Years and Is Full of Holes, but a New International Agreement Targets Fishing Subsidies
After 20 years of failed negotiations, the World Trade Organization (WTO) has secured a deal to curb harmful subsidies that contribute to overfishing. Conservationists and campaign groups welcomed last week’s agreement as historic, despite criticism of “big holes” in the agreement.
What's the Outlook on Tax Certainty for MNEs Subject to Amount A?
Readers who follow international tax developments will be familiar with the political dynamic that led to last year's unprecedented agreement among 137 countries on the so-called two-pillar solution regarding taxation of business profits of multinational enterprises (MNEs). Numerous countries' piecemeal adoption of digital services taxes and other unilateral tax measures aimed at nonresident MNEs provoked retaliatory action by the US in the form of tariffs, or the threat of tariffs, on a wide range of exports to the US from those countries.