ECIPE Seminar: Trade and Climate Change – Could Carbon Border Adjustment Work?

There have recently been renewed calls in Europe to introduce carbon border-adjustment mechanisms – a policy aiming at aligning European market openness with climate-change policies. The European Commission is now pondering various approaches for it. Some European governments are eager to have the EU championing an approach that partly restricts market access. For them, full market access in Europe should only be granted if efforts and agreements to reduce carbon emissions during the production process are in place. Other European governments are less than eager to follow that approach. At the same time, the existence of any carbon border-adjustment measure is politically controversial – inside and outside of Europe.

• Could border-adjustment measures stand up against the rules of the World Trade Organisation?
• What would be the economic impact of such measures?
• Would they raise the competitiveness of European firms?
• How would other countries respond?