When Are Carbon Border Adjustment Measures Just?

Abstract

Arguments in support of carbon border adjustment measures are often based on considerations of justice. Implementing carbon border adjustment measures would be necessary to, first, promote fair competition between corporations and, second, make carbon pricing instruments more effective and thus prevent the harms of dangerous climate change. Yet, both arguments tend to obscure considerations of distributive justice relative to the burdens of climate policies and the benefits of economic cooperation. In this article, we first explain why the case for carbon border adjustment measures based on the ideal of fair competition between corporations is flawed. Second, if the priority of harm avoidance over fair burden-sharing can justify carbon border adjustment measures, we argue that it does not justify all kinds of carbon border adjustment measures. On the contrary, it puts significant constraints on their design. We contend that just carbon border adjustment measures should include design features that allow for some form of carbon leakage risk, either via country-differentiated prices or via country-specific exemptions.