The Role of Border Measures in the Design of Unilateral Climate Policy
RFF/ENTWINED Research Program Workshop
September 4–5, 2012

First Floor Conference Center
Resources for the Future (RFF)
1616 P St. NW
Washington, DC 20036

About the Event
Issues of competitiveness and emissions leakage have been at the fore of the climate policy debate in all the major economies implementing or proposing to implement significant emissions cap-and-trade programs. While unilateral policy cannot directly impose emissions prices on foreign sources, it can complement domestic emissions pricing with border carbon adjustments to reduce leakage and increase global cost-effectiveness. Theory suggests that border adjustment measures constitute a second-best instrument to complement unilateral emissions pricing. Although border measures have a theoretical efficiency rationale, their practical implementation is subject to serious caveats. Against this background, this workshop will feature a model comparison study, the primary objective of which is to assess the efficiency and distributional impacts of border measures in order to provide answers to the following key policy questions:

• How effective are border measures in reducing carbon leakage?
  
  
• How big are the global cost savings from border measures compared to domestic emissions pricing without additional import tariffs and/or export subsidies?
  
  
• What is the incidence of border measures across regions? Do they lead to a more "equitable" distribution of economic adjustment costs or do they shift the burden from richer industrialized countries to poorer developing countries?
  
  
• Are border measures an effective tool for the protection of emissions-intensive and trade-exposed industries in unilaterally abating regions?
  

To gain robust quantitative insights into these questions, the study builds on model-based analysis of 12 expert groups that jointly study a set of pre-defined policy scenarios with harmonized assumptions and common datasets. Furthermore, each expert group complements the joint assessment with additional analysis on a specific policy-relevant topic in the context of unilateral climate policy design.

The workshop will start with an overview presentation, summarizing the major findings of the model cross-comparison. After that, the insights from the specific contributions will be grouped by theme, with presentations that are planned to last 15 minutes each, complemented with invited comments and open discussion.

Event Schedule

Tuesday, September 4

Wednesday, September 5