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GTAP Resource #6843

"The EU Carbon Adjustment : Implication on Brazilian Economy"
by Perdana, Sigit, Marc Vielle and Thais Diniz Oliveira

As the instrument supporting the realisation of EU climate neutrality targets by 2050 and encouraging decarbonisation outside its borders, the current proposed Carbon Border Adjustment Mechanism (CBAM) raises opposition from some countries. Focusing on Brazil, an EU trading partner with significant contributions of greenhouse gas emissions, this paper evaluates the impacts of the CBAM on the Brazilian economy through a comprehensive analysis of various scenarios based on the potential EU implementation of the CBAM and Brazil’s climate scenarios. Results obtained in this research alleviate concerns of detrimental and competitiveness loss from Brazilian industries. Rather, the implementation of the EU CBAM improves the trade balance of Brazil’s Energy-Intensive Industries (EII). The relatively low CO2 contents of Brazilian EII are elemental, while contributions of carbon-free technologies in electricity generation are critical factors in maximising this trade surplus. Other consequential factors affecting these results rely on contributions of CO2 removal from Brazil’s forestry of land used, and homogeneity of CBAM-imposed products.

Resource Details (Export Citation) GTAP Keywords
Category: 2023 Conference Paper
Status: Not published
By/In: Presented during the 26th Annual Conference on Global Economic Analysis (Bordeaux, France)
Date: 2023
Version: 1
Created: Perdana, S. (4/11/2023)
Updated: Perdana, S. (4/11/2023)
Visits: 555
- Dynamic modeling
- Climate change policy
- Economic growth
- Multilateral trade negotiations
- European Union
- South America

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  File format Paper_CBAM_and_Brazil_SP_MV_TDO.pdf  (552.7 KB)   Replicated: 7 time(s)
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