A border carbon adjustment is a tool which could be used to avoid carbon leakage by levelling the playing field for industries operating in countries with- and without a carbon cost. While it has been debated among experts for some time, it has now become increasingly appealing to policy makers. Indeed, as the price of carbon goes up when countries strive to meet their targets under the Paris Agreement on Climate Change, risks for leakage will increase and need to be addressed. The recent decision by the world’s second largest emitter, the United States, to leave that Agreement has further spurred the need to take a fresh look at this policy tool.
This event featured experts as well as policy makers in an exploratory dialogue about the future, if any, for BCAs.