Chapter 11: Summary of main findings
Climate change is primarily caused by an increase in global atmospheric concentrations of greenhouse gases arising from human consumption of fossil fuels and land use practices. Emissions that result from human activities are resources in the economic sense: market mechanisms, such as cap-and-trade and carbon taxation systems, putting a price on emissions and thereby reducing fossil fuel consumption, are a necessary element of the policy response to climate change. At the same time, a proper functioning of market mechanisms of emissions reduction should be secured. Countries that introduce market mechanisms to reduce emissions put their national producers at a competitive disadvantage vis-à-vis their counterparts in nations without such policies in place, and risk experiencing carbon leakage. However, at present, while the carbon price has not yet fully emerged, carbon leakage seems to be more of a political argument supported by domestic industrial lobby groups, rather than one supported by economic evidence. Political considerations are nevertheless strong enough to put the issue of equalizing emissions costs at the border on the agenda in countries with existing or pending emissions reduction systems. The uncertainty associated with reaching a post-Kyoto international climate agreement, as well as the great likelihood that advanced developing countries will be exempted from emissions reduction commitments in a new agreement, and its possible non-ratification by some countries, might provide a further reason to call for carbon equalization systems. In this situation, emissions reducing countries are likely to use carbon-related border adjustment measures (BAMs).
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.