International trade measures and carbon club

This report includes the findings of three individual impact assessments on the economic implications of carbon adjustment measures, performed with the use of three well-established computable general equilibrium (CGE) models (GEM-E3-FIT, FIDELIO, PAEG). No common scenario framework is assumed; instead, alternative specifications of a future world where EU’s CBAM plays a central role are examined and each study focuses on a different group of countries. The PAEG CGE model examines the impacts of EUCBAM and national carbon pricing schemes on the EU27 and the Brazilian economy, the FIDELIO model performs similar scenario assessment for EU27, China and India, while the GEM-E3 model examines the impacts of the CBAM adoption by different group of countries on the 10 greatest global economic forces (EU27, Turkey, China, India, Indonesia, Japan, South Korea, Australia, USA and Canada) . All models find minimal impacts of the EU CBAM both at the EU27 level and at the global state in terms of GDP and of emission reductions, while the implementation of stringer climate policies by non-EU countries yields higher impacts for both variables.