In this new paper (PDF) by Bethan Adams, Kaya Axelsson and Adam Parr, a Carbon Club is proposed, consisting of states that are considering a Border Carbon Adjustment (BCA). This would include the EU, the UK, Canada, Japan, and the US, which would cover 44% of global international trade, and present a serious lever for accelerating decarbonisation across the global market in this decisive decade. The authors argue that BCAs are a powerful mechanism to accelerate the shift to a post carbon system and help create the global economic conditions for tackling the climate mitigation.
It notes that a Border Carbon Adjustment:
• Addresses a major source of emissions: those embedded in a nation’s imports.
• Provides a financial incentive to overseas producers to invest in low emission technology.
• Reduces carbon leakage and ensures fair competition for domestic producers reducing their own emissions.
• Incentivises citizens to choose lower carbon products.
• Uses implementation and enforcement mechanisms that are already universally practised.
• Requires no international negotiations, but is aligned with the direction of travel towards climate ambition in the EU and elsewhere.
• Is seen as a fair policy across the political spectrum in key countries proposing it.
• Raises funds that can be used to promote a just transition: at home, alleviating any impact from higher prices; internationally providing climate finance for adaptation and mitigation among affected nations.
Read the full paper (PDF): https://www.smithschool.ox.ac.uk/publications/wpapers/workingpaper22-01.pdf