European Roundtable on Climate Change and Sustainable Transition and Nicholas Institute for Environmental Policy Solutions announce cooperation on Border Carbon Adjustments.
BRUSSELS, NORTH CAROLINA (May 26, 2020) – The European Roundtable on Climate Change and Sustainable Transition (ERCST) and the Nicholas Institute for Environmental Policy Solutions are pleased to announce their collaboration in examining the role that Border Carbon Adjustments (BCAs) may play in addressing asymmetry in climate ambition under the Paris Agreement, with special focus on the plans that the European Union has to examine this option. In this context, ERCST & Nicholas Institute will hold a virtual USA-EU “town hall meeting” on June 17, 2020. This activity together with other similar planned “town hall” meetings will feed into a policy paper on the international views on BCA that ERCST will publish in collaboration with its partners.
The European Green Deal has strengthened the level of climate ambition, increasing the asymmetry of climate efforts by aiming to achieve climate neutrality in the European Union by 2050. This raises the question of how to deal with competitive pressure and carbon leakage, pushing BCAs to the front as a possible solution.
Border carbon adjustments (BCAs) aim to alleviate negative effects caused by uneven climate policies by including imports and/or exempting exports. BCAs seek to level the playing field in competitive markets, incentivize trade partners to strengthen their own climate efforts and prevent leakage of carbon emissions to jurisdictions with weaker policies. These objectives can be achieved by a tariff or other fiscal measure applied to imported goods, the extension of regulatory compliance obligations (e.g. ETS) to imports or a tax exemption or regulatory relief for exports.
Senior Fellow of the Nicholas Institute, Jackson Ewing said, "with country-level climate goals as varied as ever, the potential for trade policies to level playing fields has BCA’s poised to move from the page to the global arena. Stakeholders on both sides of the Atlantic would do well to get ready.”
Andrei Marcu, Executive Director of ERCST emphasized that “the BCA, its design and impacts on trade and international cooperation need to be well understood, since it will become increasingly urgent to address the effects of asymmetrical climate change policies and BCAs are presented as a serious option. As think tanks, we will cooperate with colleagues in other countries in this effort”
The Nicholas Institute for Environmental Policy Solutions at Duke University (Durham, North Carolina) aims to improve environmental policymaking worldwide through objective, fact-based research to confront the climate crisis, clarify the economics of limiting carbon pollution, harness emerging environmental markets and identify strategies to attain community resilience. The Institute is comprised of five multidisciplinary programs, researching climate and energy, ecosystem services, oceans and coastal policy, state policy and water policy. These programs focus on helping decision makers weigh the risks and rewards of policy choices to create timely, effective and economically practical solutions to the world’s critical environmental challenges.
ERCST provides for a space for policy-makers, regulators and stakeholders to discuss climate change policy and the transition to a low GHG-economy in a sustainable way, with a focus on European climate policy but keeping in mind the global dimension of climate change policy. The experience and research input of its staff and of the stakeholders joining its activities allow the ERCST to make an intellectual analysis contributing to the European and international debates on climate change policy. Continuing its work on carbon leakage protection, the ERCST is analyzing issues and options of designing BCAs in practice and discussing coherent ‘policy packages’ that could be implemented at the EU level in 2020.
Ms. Indira Vlaminck