Many concerns about carbon pricing, especially concerning the trading of goods and services across international borders, could be addressed through the adoption of border carbon adjustments (BCAs). BCAs are tax measures imposed on identical imports at the border, when the same domestic product is impacted by carbon pricing legislation. Such legislation holds foreign products accountable to the same standards as their domestic counterparts.
This policy memo offers recommendations to policy makers regarding the design of BCAs in order to ensure that the ultimate goal of such taxes is achieved: the reduction of international carbon emissions.
