IMPACTS OF MECHANISMS TO PROMOTE PARTICIPATION IN CLIMATE MITIGATION: BORDER CARBON ADJUSTMENTS VERSUS UNIFORM TARIFF MEASURES

Because free-riding behavior is an inherent characteristic of climate change, how to protect the economic benefits of the emission reduction regions and prompt the noncooperative region to join the emission reduction coalition is particularly important. In this study, we use a global multi-region multi-sector CGE model to compare the impacts of border carbon adjustment (BCA) and two unified tariff mechanisms based on different implementation principles on USA. The results show that the BCA is more effective in reducing carbon leakage in USA than the uniform tariff mechanisms. However, for GDP and welfare losses, the scenario Tariff-carbon-reduction results in greater GDP and welfare losses in USA, which is more conducive to prompting USA to implement carbon reduction policies than the BCA measures. Finally, the sensitivity analysis of carbon price levels and key substitution elasticity further confirmed the results.