Reducing the Decarbonisation Cost Burden for EU Energy-Intensive Industries

Carbon leakage features prominently in the climate policy debate economies implementing policies, especially EU. The imposition of carbon pricing impacts negatively competitiveness energy-intensive industries, inducing their relocation to countries with weaker environmental regulation. Unilateral may complement domestic emissions border adjustment reduce and protect manufacturing. Here, we use an enhanced version GEM-E3-FIT model assess macro-economic when EU unilaterally implements Green Deal goals, leading a 25% over 2020–2050. size composition, terms GHG energy intensities, undertaking emission reductions matter for leakage, which is significantly reduced China joins mitigation effort, as result its large market high intensity production. Chemicals metals face stronger risks non-abating countries. Border Adjustment can largely negative activity on trade-exposed industries regulating countries, by shifting reduction through implicit changes product prices.