GTAP Resources: Resource Display
| GTAP Resource #7862 |
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"Enhancing the Carbon Border Adjustment Mechanism through Endogenized Value-Added Inputs" Authors: Kim, Yong-Gun, Tae Yong Jung and Eun Young Kim Abstract This study proposes an enhanced framework for the Carbon Border Adjustment Mechanism (CBAM) by internalizing value-added inputs—specifically capital, labor, and taxes—which are traditionally treated as exogenous in carbon accounting. Utilizing GTAP 2017 input-output tables and a closed input-output model, the research quantifies carbon emissions across four accounting scenarios, ranging from a standard intermediate consumption approach to a fully closed model. Key findings indicate: Expanding the accounting scope significantly shifts the perceived flow of embodied carbon. Under a fully closed model, the net transfer of $CO_2$ from developing to industrialized regions is approximately 6,991 MtCO2, nearly five times higher than the 1,405 MtCO2 identified via the standard consumption-based approach. While unilateral reduction by industrialized regions results in a leakage rate of 0.13%, implementing a CBAM that includes endogenized investment and government services reduces this leakage further to 0.098%. Although a wider CBAM boundary increases environmental efficacy and drives higher emission reductions in developing regions, it leads to a greater global GDP loss and places a disproportionate economic burden on non-regulated developing nations. The paper concludes that while endogenizing value-added inputs provides a more comprehensive representation of global carbon flows, policymakers must balance these environmental gains against the escalating economic costs for developing regions. |
| Resource Details () | GTAP Keywords | ||||||||||||||||
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- Climate change policy - GTAP Data Base and extensions - Dynamic modeling - Global |
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Public Access  GTAP Resource 7862 (180.3 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 4/20/2026 1:44:43 PM
