Research Report Making Border Carbon Adjustments Work in Law and Practice
Adele C. Morris
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This paper addresses issues relating to the creation of border carbon adjustments (BCAs) as part of a carbon tax. A carbon tax that is imposed only in the U.S. could put American firms at a competitive disadvantage. A BCA could level the playing field so that U.S. and foreign-firms face the same greenhouse gas tax cost of producing for consumption in any given country. The BCA would tax the carbon content of imports and rebate carbon tax costs on U.S. exports. While simple in concept, BCAs raise numerous issues in practice. Although solutions are available, they are unlikely to be elegant.
Research Areas Taxes and budgets
Tags Campaigns, proposals, and reforms Federal tax issues and reform proposals
Policy Centers Urban-Brookings Tax Policy Center