GTAP Resources: Resource Display
| GTAP Resource #7747 |
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"The Global Trade and Environmental Effects of Carbon Border Tariffs" by Cao, Jing, Chen Fang, Xian Hu and Mun Ho Abstract The European Union just added a carbon border adjustment mechanism (CBAM) to its carbon emission trading system (EU ETS) to protect industries covered by the ETS from imports lacking equivalent carbon prices and mitigate carbon leakage. Other developed countries are also contemplating carbon border adjustments, and thus their impacts on global trade and economic growth become a critical concern for many countries. We develop a dynamic recursive global model with 10 world regions and 29 sectors to simulate the impacts of the EU CBAM on trade and output. We find that the EU ETS without a CBAM causes significant carbon leakage due to increased fuel consumption and energy-intensive manufacturing activities outside the EU. Adding CBAM tariffs only marginally reduces this leakage, from 59.4% to 54.6%, due to a shift to imports from cleaner regions. The carbon tariffs adversely affect China and India, as they reduce exports covered by the CBAM, while countries like the US and other countries with lower carbon intensities, experience minimal aggregate economic impacts. However, the CBAM hurts non-CBAM sectors within the EU, leading to a lower EU GDP. |
| Resource Details () | GTAP Keywords | ||||||||||||||||
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- Climate change policy - GTAP Data Base and extensions - Non-Tariff barriers - Dynamic modeling - Global |
| Attachments |
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If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.
Public Access  GTAP_0413_submission (4.9 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 4/13/2026 1:32:49 PM
