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GTAP Resource #6881

"Exploring potential impacts of carbon border adjustment mechanisms and climate clubs in agriculture"
by Jensbye, Laerke, Francesco Clora and Wusheng Yu

Proposals on applying carbon taxes for reducing agricultural emissions in several net food exporting countries prompt the discussion on using CABM to address carbon leakages and competitiveness concerns. In this study, we apply a modified recursive dynamic GTAP-RD model to quantify the potential implications of alternative agricultural CBAMs in the context of climate clubs, with the focus placed on the emission-intensive livestock sectors. In scenario 1, the EU is assumed to be the only region implementing a CBAM on agricultural imports. In scenario 2, we consider a climate club formed by EU and other countries with similar high abatement ambitions. The selection of the countries in the climate club is based on the cluster analysis of Jensbye et al. (2022). Members of the climate club set similar agricultural carbon prices and impose a common CBAM on imports from the rest of the world. In scenario 3, we expand the climate club to all major agri-food exporters. Simulation results on agricultural production and trade patterns and the associated changes in regional and global emissions and carbon leakages will provide insights into the effectiveness and the context of using CBAM as a policy tool to help realize climate ambitions.

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
Created: Yu, W. (4/13/2023)
Updated: Yu, W. (4/13/2023)
Visits: 426
- Dynamic modeling
- Model extension/development
- Climate change policy
- Trade and the environment
- European Union

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