Briefing Paper 68 – August 2022 Camilla Jensen, Guillermo Larbalestier, Peter Holmes Key Points Introduction Background Oil versus Gas The importance of market power to policy analysis Import tariffs, import bans or a buyer’s club price cap? Policy evaluation Conclusion Download Briefing Paper 68 Key Points Economic sanctions against Russia targeted [...]
In addition to the military support being given to Ukraine, efforts to halt any further Russian advancements continue to be focused on economic sanctions that aim to hamper Russia’s ability to finance the invasion. This Briefing Paper provides analysis of the pros, cons and effectiveness of current trade policy responses in terms of the short-term aim of cutting Russia’s oil rents and the long-term aim of creating a complete Energy Curtain between Russia and the West. We find that whilst current interventions may go some way in meeting the target of decoupling from Russian oil and gas, they may not be effective in the aim of impacting negatively on Russian revenues, and in the process serve to raise energy prices. While high prices on fossil fuels are beneficial for the green transition, this is only true when there are viable alternatives to fossil fuels available. Read Briefing Paper 68: The Energy Curtain: All Eyes On Fossil Fuel Prices This Summer
Download Briefing Paper 64 Briefing Paper 64 – December 2021 Camilla Jensen, Michael Gasiorek and Emily Lydgate Key points Introduction The problem of carbon transfers and leakage in the UK context Focus, assumptions & policy scenarios The UK’s own ETS after Brexit – how does it work? Identifying UK industries at risk of carbon leakage Potential implications of a UK BCA and the EU’s CBAM Policy implications Conclusion Key points The UK, as one of the most highly developed countries in the world, is also among the top destinations of carbon imports. A Border Carbon Adjustment (BCA) involves extending domestic carbon pricing by introducing carbon-related charges on imported products, typically in high emitting sectors which are those at risk of carbon leakage. There is the possibility that if the EU introduces a CBAM and the UK does not, the UK could become more of a target for carbon-intensive trade from third countries. The EU ETS allows for other schemes to be linked. Both the UK and EU are planning ETS changes, so unless the two systems continue to mirror each other, the earlier that the two systems can be linked the more straightforward the process will be. Four [...]
The idea of introducing a Border Carbon Adjustment has been raised by various countries and major trading partners of the UK, most notably the EU, with its Carbon Border Adjustment Mechanism. This Briefing Paper seeks to address the possible implications of a border carbon adjustment mechanism for the UK. We examine the potential impact on specific industries and consider implications of cooperation with the EU on ETS schemes and BCAs, the pros and cons to the UK of applying such a new type of policy tool and for maintaining trade, investment and job stability in the UK, and with trading partners, and the extent to which it might counter the problem of carbon leakage. Read Briefing Paper 64: UK POLICY ON CARBON LEAKAGE
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