Critical Study of Border Carbon Adjustments


  • Aarushi Joshi


The paper seeks to refute the imposition of Border Carbon Adjustments (BCA) both from theoretical and legal perspectives. Not only are BCAs expected to defy WTO norms but they are also against the spirit of Kyoto and post-Kyoto protocols. These taxes are expected to become a tool of protectionism and will be against the spirit of free and fair trade. In the current scenario when most of the economies have recognised the need to undertake climate change measures, such adjustments on imports will only serve to discriminate against a subset of countries, mostly developing. In addition, the design of such taxes is not only extremely complex leading to an element of arbitrariness but the corresponding data requirements are humongous. It is highly unlikely that the developing countries will have the resources to collect such complex data sets. Moreover, BCAs will also face stiff opposition on grounds of violating the WTO norms. It will be very difficult for the implementing countries to comply with National Treatment and Most Preferred Nation clauses for the WTO to condone them. That said, the devil lies in the details and unless and until these are imposed and face opposition in WTO, it is hard to reach a conclusion with definiteness.


Kossoy, A., Peszko, G., Oppermann, K., Prytz, N., Gilbert, A., Klein, N., ... & Wong, L. (2015). Carbon Pricing Watch 2015 (No. 21986). The World


Cosbey, A. (2008, June). Border carbon adjustment. In IISD Background Paper for the Trade and Climate Change Seminar, June (pp. 18-20).

Reinaud, J. (2009). Trade, competitiveness and carbon leakage: challenges and opportunities. Energy, Environment and Development

Programme Paper, 9(01).

Reinaud, J. (2008). Climate policy and carbon leakage: Impacts of the European emissions trading scheme on aluminium. International

Energy Agency, IEA.

Arlinghaus, J. (2015), “Impacts of Carbon Prices on Indicators of Competitiveness: A Review of Empirical Findings”, OECD Environment

Working Papers, No. 87, OECD Publishing, Paris.

Anger, N., & Oberndorfer, U. (2008). Firm performance and employment in the EU emissions trading scheme: An empirical assessment for

Germany. Energy policy, 36(1), 12-22.

Martin, R., De Preux, L. B., & Wagner, U. J. (2014). The impact of a carbon tax on manufacturing: Evidence from microdata. Journal of Public

Economics, 117, 1-14.

Das, K. (2011). Can Border Carbon Adjustments be WTO-Legal. Manchester J. Int'l Econ. L., 8, 65.

McLure Jr, C. E. (2014). Selected international aspects of carbon taxation. The American Economic Review, 104(5), 552-556.

Brewster, R. (2009, March). The Dangers of Carbon Tariffs. In Proceedings of the 103rd Annual Meeting (Vol.103, pp. 372-375). American

Society for International Law.

Das, K. (2012). How Vulnerable Is India's Trade to Possible Border Carbon Adjustments in the EU. J. World Trade, 46, 249.




How to Cite

Aarushi Joshi. (2017). Critical Study of Border Carbon Adjustments. Research Inspiration: An International Multidisciplinary E-Journal, 2(III), 22–33. Retrieved from