Research On Carbon Border Adjustments And Alternative Scenarios

People concerns about the problem of climate change and the problem of global common goods market failure, which lead to a trade policy of greenhouse gas emission reduction-carbon border adjustment. Base on the fact that the transfer of greenhouse gas emission is through two ways:trade and foreign direct investment. Therefore, this thesis researches on the foreign trade policies to reduce the transfer emission, which are carbon border adjustment measures and the choice of their alternative policies. This dissertation makes a comprehensive and systematic study on the mechanism. The trends and the economic impact of carbon border adjustment and its alternative policies.The research idea of this thesis starts with the foreign trade policies of reducing the transfer emission, and researches on carbon border adjustment measures’implement background as well as policy responses from different parties. The thesis analyses Carbon border adjustment’s unlawfulness and Partial equilibrium effects in the system of WTO, then makes analysis of cases on the latest development of this measures, which is the practice of EU aircraft industry’s carbon emission border adjustment. The thesis believes that the measures which some countries have been taking of carbon border adjustment have abused of GATT’s escape clauses and violated WTO’s original intention, which aims to minimize the contradiction between development of trade and environment. By analyzing the illegality and impossibility of carbon border adjustment in the environment of WTO and GATT, the thesis points that the adjustment is implementing trade protection in the name of environment protection. Thesis compares the political effects of carbon border adjustment and the domestic policies and international regulations similar to the external trade policies reducing transfer emission. Then it draws the conclusion that the practice of carbon border the result of trade protection policies’options under the balance mechanism of each country’s interests. This thesis attempts to find the alternative projects and balance point of controlling carbon emission effectively and avoiding trade protectionism. It proposes that in the situation of transfer emission, the developed economies may adopt the carbon emission density control method, which is the second best option to reduce carbon emission. And the developing economies can use the Nobel laureate in economics, Elinor Ostrom’s poly-centric theory to establish a polycentric carbon emission trading market in the resident households. On the world level, it is workable to unite the dispersed carbon trading markets which the various countries have established to reduce the greenhouse gases’ transfer emission.This thesis analyzes that the basic reasons of the developed economies’abusing of carbon border adjustment measures are the carbon emission responsibility’s unreasonable allocation, the ecological orientation of trade policy decision-making mechanism, the trade regulations’improper use in domestic law. The thesis summarizes China’s foreign trade and domestic policy adjustments and the results for achieving the low-carbon economy goals It proposes the reasonable countermeasure for China to deal with the developed economies’ transfer emission, and to reduce carbon emission effectively from the angles of international organizations, domestic policies and foreign trade policies and measures.The main innovation of this thesis:(1) from the perspective of the economics mechanism of action, the applicability of WTO rules to analyze the legitimacy and feasibility of carbon border adjustment measures, and based on the EU aviation industry carbon tariff arrangements, further demonstrated the possibility,the origin, the permeability and its far-reaching economic impact of carbon border adjustment measures;(2) innovatively use the poly-centric theorem to explore effective scheme and approach to solve the problem of climate change. This thesis thinks that solve the problem of climate change belongs to the global common goods category, relying solely on one country or a few countries policy arrangement cannot solve the market failure of global common goods.While poly-centric theory show us the way to solve the problem. In order to solve problem of the reduction of global carbon emission, we should through the establish an international competition and cooperation coordination mechanism to deal with the problems of market failure of climate change. Then, proposed an alternative carbon border regulation unit outputs the carbon intensity of the law;(3) Based on the analysis of carbon emissions trading system and carbon tax policy’s effect, it proposes the effective practice of carbon emissions trading system, which is the paid carbon emission quota distribution method including the households.(4) It carries on the comparative analysis to3kinds of border carbon adjustment implementation plans by using analytical hierarchy process model. Then it comes to a conclusion that the border carbon adjustment measures only have a deterrent effect to other countries’ carbon emission reduction, but have no power to urge other countries to carry on carbon emission reduction. High possible it might evolve into the new trade tariff, form the trade protection and hinder the world free trade. This thesis carries on the comparative analysis to the border carbon adjustment implementation, differentiation center poly centric carbon emissions trading system, standard of unit output density of carbon emission, and the paid carbon emission quota distribution method which includes the households with5evaluation parameters including universality, impartiality, feasibility, the effect of the actual emission reduction and economic efficiency by using analytical hierarchy process model. Then it gives priority sequence scheme for international carbon emission reduction, and selects the best scheme of international carbon emission reduction.