This brief aims to highlight some of the difficulties involved in elaborating a working border carbon adjustment (BCA) regime. It demonstrates both the tensions between the various possible BCA objectives and the necessarily imperfect options that are available for bridging the tension between...

The EU is considering implementing a Carbon Border Adjustment Mechanism. To inform the policy decision, we assess eight energy-intensive trade-exposed sectors in depth to distill what their characteristics imply for the shape of an ideal mechanism. The results highlight the difficulty of finding...

For Canadian policy makers, the relatively straightforward economics of a border carbon adjustment (BCA) is complicated in practice by four challenges. First, Canadian carbon-pricing regimes have been developed from the bottom up, being primarily designed at the provincial rather than the...

Most CO2 abatement policies reduce the demand for fossil fuels and therefore their price in international markets. If these policies are not global, this price decrease raises emissions in countries without CO2 abatement policies, generating "carbon leakage". On the other hand, if the countries...

Decision makers facing emission-reduction targets need to decide which abatement measures to implement, and in which order. This article investigates how marginal abatement cost (MAC) curves can inform such a decision. We re-analyse a MAC curve built for Brazil by 2030, and show that...

This paper finds that it is optimal to start a long-term emission-reduction strategy with significant short-term abatement investment, even if the optimal carbon price starts low and grows progressively over time. Moreover, optimal marginal abatement investment costs differ across sectors of the...