IPC–MERCATOR POLICY BRIEF January 2021 - THE EU’S CARBON BORDER ADJUSTMENT MECHANISM AND THE TURKISH ECONOMY

The Initiative is based on the premise that the acquisition of knowledge and the exchange of people and ideas are preconditions for meeting the challenges of an increasingly globalized world in the 21st century. [...] The It would be fair to think of the EGD as the driving number of allowances has been decreasing along force behind the maturing “New Climate Regime,” with the emission reduction targets, which increas- which would ultimately transform other countries es the costs of the carbon- and energy-intensive with trade, financial, and political ties to the EU. [...] Figure 1 shows that the total emissions of the EU28 The ETS and the above-mentioned regulations will countries and the ETS member Iceland fell from affect the future form of the CBA. [...] Scope 1 Carbon Cost under the ETS Yet, the carbon cost of the cement factory (which The extra costs born by the cement factory are still hampers its competitiveness) is not limited to not limited to the costs associated with the “ETS- Scope 1 emissions. [...] direct carbon costs for both the Scope 2 emissions attached to the electricity purchase and the Scope Leaving aside the “measurement problem” that 3 emissions attached to the additional purchased will be described in the proceeding section, the inputs (see Figure 5).