Carbon Pricing of Basic Materials: Incentives and Risks for the Value Chain and Consumers

摘要: For the European Union to realise its ambition of carbon neutrality, emissions from basic material production need be reduced through low-carbon processes, efficiency and substitution, as well enhanced recycling. Different reform options for EU ETS are discussed that ensure a consistent price incentive all these mitigation options, while avoiding risk leakage. This paper offers first quantification potential leakage risks, distributional implications additional revenues associated with different mechanisms: an import- only border adjustment (BCA), symmetric BCA, excise embodied at fixed benchmark level in combination continued free allocation. We estimate product-level intensities about 4,400 commodity groups, including materials, products, manufactured goods compute implied changes cost increases relative gross value added assess scale risks.