October 2nd, 2019


A growing number of scholars, environmentalists, politicians, and business leaders have recommended border carbon adjustments (BCAs) to support domestic climate policies, particularly market-based instruments for carbon pricing. By extending domestic policies beyond a jurisdiction’s boundaries, BCAs can put domestic and foreign industries on a level playing field, counter carbon leakage, and incentivize other jurisdictions to take climate action. In theory, therefore, BCAs offer the promise of environmental, economic, and political benefits. However, BCAs are conspicuously absent in practice. Although an increasing number of carbon pricing policies is being adopted throughout the world, very few examples of BCAs exist, and so far none have been implemented at a general scale in any jurisdiction.


The Clean Economy Working Paper Series disseminates findings of ongoing environmental and clean economy work conducted by researchers from a range of disciplines. These working papers are meant to make results of relevant scholarly work available in a preliminary form. Although these papers have not undergone a peer-review process, they meet general standards of scholarly excellence. The views expressed in these working papers are those of the authors and do not necessarily reflect the opinions of Smart Prosperity Institute.