There is concern that unilateral climate action in the EU agricultural sector may cause higher
emissions abroad (i.e. emission leakage) and harm the competitiveness of the EU´s agricultural
sector. Applying the CAPRI model, this paper assesses the potential for border carbon
adjustments (BCA) in the form of import tariffs to limit the leakage of emissions and preserve
the competitiveness of the EU agricultural sector.
Our results show that even though BCA
reduces emission leakage, 92 % of the emission reduction in the EU is still offset by emission
increases outside the EU. What limits the effectiveness of the investigated BCA measures is
that these measures are unilateral, and thus they only adjust for the reduced competitiveness at
the EU internal market, whereas EU exports are still largely replaced by commodities produced
in less GHG-efficient countries. Therefore, BCA alone cannot solve the high risk of emission
leakage in the agri-food sector as a consequence of unilateral EU climate action.
För en kort version på svenska se AgriFood Policy Brief 2019:10