Carbon Pricing as a Strategic Tool for Improving Trade Competitiveness
By Donggyu Yi [Associate Professor, School of Economics, University of Seoul]
► The Clean Competition Act (CCA), a U.S. Border Carbon Adjustment (BCA) policy, aims to reduce global carbon emissions by imposing a carbon intensity charge on imports, but it also functions as a protectionist measure to enhance U.S. industrial competitiveness.
► While policies like the CCA and the EU's CBAM address issues like carbon leakage and industrial competitiveness, they risk increasing trade tensions, raising domestic consumer prices, and incentivizing avoidance strategies.
► For South Korea, the potential implementation of the CCA poses significant challenges to key export industries, particularly carbon-intensive sectors like steel, necessitating proactive strategies that balance environmental and economic sustainability.
