The seminar will examine economic rationale for BCAs in the context of diverging international carbon prices, with focus on competitiveness concerns, carbon leakage risks, and incentives for climate action abroad. We will discuss key design and implementation challenges, including coverage, measurement of embodied emissions, export rebates, revenue use, and coordination with trading partners; and compare BCAs with alternative approaches to mitigate competitiveness risks. We will show that while BCAs can help address competitiveness and leakage in energy intensive, trade exposed sectors, their effectiveness depends critically on detailed design choices and international coordination.

Attendees are invited to complete a short survey included at the following link. Responses will help shape the discussion.

Bio

Ian Parry is the Principal Environmental Fiscal Policy Expert in the Climate Policy Division of the IMF’s Fiscal Affairs Department. He worked at Resources for the Future from 1995 to 2010 where he held the Allen Kneese Chair in Environmental Economics. He has a PhD in economics from the University of Chicago in 1993. Parry’s research focuses on country-level analysis of comprehensive mitigation strategies and their broader fiscal and economic impacts. Parry also quantifies the broader environmental (e.g., local air pollution) costs of fossil fuel use at the country level and efficient levels of fuel prices needed to reflect supply and environmental costs. 

Karlygash Zhunussova is an Economist at the IMF’s Climate Policy Division, Fiscal Affairs Department. She specializes in climate change mitigation, carbon pricing, mitigation policies equivalence, and environmental taxation. Before joining the IMF in 2021, she worked on climate change issues in the World Bank and as a consultant to the government of Kazakhstan on various strategic initiatives. She holds a Master’s degree in Public Administration in International Development from Harvard University.