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Border carbon adjustments in agri-food markets : Not as effective as one might think

Nordin, Ida ; Wilhelmsson, Fredrik LU ; Jansson, Torbjörn ; Fellmann, Thomas ; Barreiro-Hurle, Jesús and Himics, Mihaly (2025) In Q Open 5(1).
Abstract

Using the EU as case study, we simulate the impact of border carbon adjustments on agri-food markets. While border carbon adjustments alleviate adverse carbon price impacts on EU agricultural competitiveness and emission leakage, our simulation results also reveal that (i) border carbon adjustments may diminish domestic mitigation efforts, thereby partly offsetting benefits from reduced emission leakage, and (ii) trade diversion further undermines global emission reduction. The results indicate that border carbon adjustments on agri-food products in major exporting countries with emission-efficient production systems may not reduce global emissions as effectively as commonly assumed, highlighting the importance of emission efficiency... (More)

Using the EU as case study, we simulate the impact of border carbon adjustments on agri-food markets. While border carbon adjustments alleviate adverse carbon price impacts on EU agricultural competitiveness and emission leakage, our simulation results also reveal that (i) border carbon adjustments may diminish domestic mitigation efforts, thereby partly offsetting benefits from reduced emission leakage, and (ii) trade diversion further undermines global emission reduction. The results indicate that border carbon adjustments on agri-food products in major exporting countries with emission-efficient production systems may not reduce global emissions as effectively as commonly assumed, highlighting the importance of emission efficiency improvements especially in developing and emerging countries.

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author
; ; ; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Agriculture, Border carbon adjustments, Carbon tax, Climate policy, Competitiveness
in
Q Open
volume
5
issue
1
article number
qoae015
publisher
Oxford University Press
external identifiers
  • scopus:105006924560
ISSN
2633-9048
DOI
10.1093/qopen/qoae015
language
English
LU publication?
yes
id
c5d1b2c8-0fca-4491-bf33-8d11555dd2ec
date added to LUP
2025-09-24 14:46:08
date last changed
2025-10-14 11:45:14
@article{c5d1b2c8-0fca-4491-bf33-8d11555dd2ec,
  abstract     = {{<p>Using the EU as case study, we simulate the impact of border carbon adjustments on agri-food markets. While border carbon adjustments alleviate adverse carbon price impacts on EU agricultural competitiveness and emission leakage, our simulation results also reveal that (i) border carbon adjustments may diminish domestic mitigation efforts, thereby partly offsetting benefits from reduced emission leakage, and (ii) trade diversion further undermines global emission reduction. The results indicate that border carbon adjustments on agri-food products in major exporting countries with emission-efficient production systems may not reduce global emissions as effectively as commonly assumed, highlighting the importance of emission efficiency improvements especially in developing and emerging countries.</p>}},
  author       = {{Nordin, Ida and Wilhelmsson, Fredrik and Jansson, Torbjörn and Fellmann, Thomas and Barreiro-Hurle, Jesús and Himics, Mihaly}},
  issn         = {{2633-9048}},
  keywords     = {{Agriculture; Border carbon adjustments; Carbon tax; Climate policy; Competitiveness}},
  language     = {{eng}},
  number       = {{1}},
  publisher    = {{Oxford University Press}},
  series       = {{Q Open}},
  title        = {{Border carbon adjustments in agri-food markets : Not as effective as one might think}},
  url          = {{http://dx.doi.org/10.1093/qopen/qoae015}},
  doi          = {{10.1093/qopen/qoae015}},
  volume       = {{5}},
  year         = {{2025}},
}