Modeling the impact of carbon border policies on emissions, global value chains, and welfare

F ancois, Joseph F.; Fos e -McG ego , Neil
Wo king Pape
Modeling he impac o ca bon bo de policies on
emissions, global alue chains, and wel a e
ADB Economics Wo king Pape Se ies, No. 792
P o ided in Coope a ion wi h:
Asian De elopmen Bank (ADB), Manila
Sugges ed Ci a ion: F ancois, Joseph F.; Fos e -McG ego , Neil (2025) : Modeling he impac o ca bon
bo de policies on emissions, global alue chains, and wel a e, ADB Economics Wo king Pape
Se ies, No. 792, Asian De elopmen Bank (ADB), Manila,
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ASIAN DEVELOPMENT BANK
ASIAN DEVELOPMENT BANK
6 ADB A enue, Mandaluyong Ci y
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MODELING THE IMPACT
OF CARBON BORDER POLICIES
ON EMISSIONS, GLOBAL VALUE
CHAINS, AND WELFARE
Joseph F ancois and Neil Fos e -McG ego
ADB ECONOMICS
WORKING PAPER SERIES
NO. 792
July 2025
Modeling he Impac o Ca bon Bo de Policies on Emissions,
Global Value Chains, and Wel a e
This pape employs a compu a ional gene al equilib ium model o es ima e he impac o bo de ca bon
adjus men (BCA) policies on emissions and economic pe o mance. Resul s sugges ha while an expanded
scheme o ca bon p ices and BCAs can educe emissions, unde lying g ow h ends quickly undo he highes
emissions educ ions modeled. Resul s also sugges ha in some cases he po en ial impac s o mi iga ion
ac ions h ough domes ic and ade- ela ed ca bon axes may all disp opo iona ely on poo e egions.
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ADB Economics Wo king Pape Se ies
Modeling he Impac o Ca bon Bo de Policies on Emissions,
Global Value Chains, and Wel a e
Joseph F ancois and Neil Fos e -McG ego
No. 792 | July 2025
Joseph F ancois (joseph. [email p o ec ed]) is a
p o esso o economics a he Uni e si y o Be n
and a ellow a he Cen e o Economic Policy
Resea ch, London. Neil Fos e -McG ego
(n os e mcg ego @adb.o g) is a p incipal economis
a he Economic Resea ch and De elopmen Impac
Depa men , Asian De elopmen Bank.
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ABSTRACT
This pape employs a compu a ional gene al equilib ium model o examine he po en ial impac
o he Eu opean Union’s Ca bon Bo de Adjus men Mechanism (CBAM). The pape conside s
he impac o ex ending CBAM o o he economies, examining whe he app oaches ha equi e
inc eased coo dina ion o ca bon p icing o e a g ea e numbe o ju isdic ions can inc ease he
impac o CBAM. Resul s sugges ha while an expanded scheme o ca bon p ices and bo de
ca bon axes can educe emissions, unde lying global economic g ow h ends a e mo e han
enough o quickly undo he highes emissions educ ions modelled he e. As such, sus ained
echnical inno a ion and majo changes in he unde lying s uc u e o ene gy sys ems will be
equi ed o mee In e go e nmen al Panel on Clima e Change (IPCC) a ge s. The esul s also
ein o ce ano he message o ecen IPCC epo s, namely ha in some cases he po en ial
impac s o mi iga ion ac ions h ough domes ic and ade- ela ed ca bon axes may all
disp opo iona ely on poo e egions.
Keywo ds: compu able gene al equilib ium, ca bon p icing, bo de ca bon adjus men s
JEL codes: C68, Q56
__________________________
This pape was a backg ound pape o he Asian De elopmen Bank’s Asian Economic In eg a ion Repo
2024: Deca bonizing Global Value Chains. Ea ly d a s o his pape we e p esen ed in he Asian Economic
In eg a ion Repo (AEIR) Theme Chap e Wo kshop (Oc obe 2023) and a he UK T ade Policy
Obse a o y, Uni e si y o Sussex (Ma ch 2024).

1. In oduc ion
Ca bon p icing policies a e a cen al ea u e o mechanisms designed o balance he socie al
cos s o ca bon emissions agains associa ed economic cos s linked o emission educ ions. The
design o such schemes can a y widely, e lec ing he non-binding and bo om-up app oach o
na ional commi men s wi hin he Pa is Ag eemen . Gi en he e ogenei y in bo h he design and
he e ec i eness o ca bon polices, he mo e ambi ious Pa ies o he Pa is Ag eemen ace a
dilemma. How do you scale up you own clima e ambi ions o highe cos s o ca bon
domes ically wi hou being unde cu by ca bon leakage om ab oad?
I is in his con ex ha he Eu opean Union (EU) is implemen ing an ambi ious, ull- ledged clima e
policy package ha hea ily elies on bo h a e ised and much s eng hened Emissions T ading
Sys em (ETS) alongside he in oduc ion o a ca bon bo de ax (CBAM) on impo ed p oduc s.
CBAM is in ended o educe he isks o ca bon leakage. Ca bon leakage in ol es ca bon-
in ensi e p oduc ion s ages being shi ed om economies wi h ca bon p icing o economies wi h
less-s ingen ca bon ma ke s and egula ions. The po en ial o ca bon leakage elies upon
di e ences in ca bon in ensi ies ac oss economies as well as an open ade egime wi h low ade
cos s ha allows o p oduc ion o shi ac oss bo de s. Ca bon leakage has se e al nega i e
implica ions. By shi ing p oduc ion beyond legisla i e bounda ies, ca bon leakage makes i mo e
di icul o na ional go e nmen s o legisla e agains ca bon emissions and can unde cu he
policy objec i es d i ing ca bon p icing mechanisms. Since p oduc ion will be shi ed o
economies wi h weake en i onmen al legisla ion and, consequen ly, mo e emissions-in ensi e
p oduc ion echniques, his edi ec ion is also likely o esul in highe emissions o a gi en le el
o p oduc ion. Such an ou come is u he likely o lead o push back om local p oduce s, which
could lead o a e e sal o clima e policies.
E idence o da e sugges s ha ca bon leakage is no a majo ac i i y (G ubb e al. 2022). Ye , he
incen i es o ca bon leakage om he EU a e expec ed o ise as he p ice o EU emission
allowances is inc eased in coming yea s. The EU’s CBAM is hus a esponse o his isk o ca bon
leakage. The esponse in ol es in oducing CBAM as a lanking mechanism alongside igh e
ca bon c edi s and highe ca bon p ices wi hin he EU ETS, wi h he mechanism aking he o m
o a no ional ETS, and he impo e s o co e ed p oduc s being equi ed o pu chase non adable
‘CBAM ce i ica es’ a a p ice ha mi o s ha o EU emission allowances.1 The s a ed aim is o
bo h ensu e a ai p ice o ca bon emi ed du ing p oduc ion o goods en e ing he EU and o
encou age lowe ca bon in ensi y in p oduc ion ou side he EU economies. The mo e owa d
highe ca bon p ices and he pa allel in oduc ion o ca bon bo de axes has d i en mo e
in ensi e discussion abou designing policies o limi g eenhouse gas emissions.
In his pape we employ a compu a ional gene al equilib ium (CGE) model o wo ld p oduc ion
and ade o examine he po en ial impac o a ious policy scena ios on ca bon emissions, on
he s uc u e o p oduc ion and ade, and on o he socioeconomic ou comes. The s a ing poin
is o examine he impac o he EU’s CBAM on hese indica o s o he EU and o he egions, wi h
a speci ic ocus on di e en egions in Asia. Acknowledging ha he con ibu ion o impo s in o
he EU o global emissions emain limi ed, he pape also conside s he impac o ex ending CBAM
(and ETS) o o he economies and egions. Gi en he po en ial o i ms o shi p oduc ion o
ou side o he EU in esponse o CBAM, a conce n is ha domes ic educ ions in he EU may be
ma ched by inc eases ou side o he EU. One way o a oiding his is o coo dina e ca bon p icing
1 The EU’s CBAM policy has eigni ed a longs anding con o e sy ega ding he legali y o such measu es. The deba e
i sel is no new, as he idea o imposing some o m o bo de ca bon adjus men (BCA) has been discussed in he
policy li e a u e o o e 15 yea s. See Espa, F ancois, and an Assel (2022) o u he discussion on he legal issues
a play.
2
o e a g ea e numbe o ju isdic ions, limi ing he oppo uni ies o his ealloca ion o emissions
in ensi e p oduc ion. As such, we conside ex ending CBAM o o he OECD economies and o
Asian egions, compa ing es ima ed ou comes o hose when CBAM is only implemen ed in he
EU. Besides expanding he co e age o CBAM, he pape also conside s he possible con ibu ion
o lanking policy-d i en changes in he ca bon in ensi y o indus y in low and middle-income
economies. The in en ion is o conside he ela i e impo ance o echnology imp o emen s—
speci ically he di usion o echnologies o low and middle-income economies ha esul s in a
con e gence o emissions in ensi ies owa d hose in mo e e icien ad anced economies—in
educing emissions, and whe he his app oach can mi iga e any nega i e economic
consequences o ca bon p icing.
The pape begins wi h a b ie o e iew o he li e a u e on CBAM and i s es ima ed impac s in
Sec ion 2. Sec ion 3 hen discusses he CGE model adop ed, he da a used in he analysis, and
he di e en policy scena ios examined, wi h Sec ion 4 desc ibing he esul s o he analysis.
Sec ion 5 concludes.
2. Li e a u e Re iew
A g owing li e a u e assesses he po en ial impac s o CBAM on he EU and o he economies,
wi h many s udies adop ing a CGE app oach o examine hese impac s. The in en ion o his
e iew is no o p o ide a comp ehensi e su ey o hese s udies, bu o highligh some o he
mo e ecen app oaches and esul s.
A ange o s udies examine he consequences o CBAM on non-EU economies, wi h Xiaobei,
Fan, and Jun (2022), o example, adop ing a dynamic CGE model o examine he consequences
o o he economies om he EU’s CBAM. Thei esul s sugges ha CBAM could widen he GDP
and wel a e gap be ween de eloped and de eloping economies and may also make i mo e
di icul o some de eloping economies o deca bonize hei economies. Gi en he po en ially
nega i e consequences on de eloping economies, hey p opose using he e enue om CBAM
o c ea e a deca boniza ion und.
Rela ed s udies ocus on he impac s o CBAM on speci ic economies. Takeda and A imu a
(2024) use CGE o conside he impac s o CBAM on Japan. Thei esul s sugges an o e all
posi i e impac o CBAM on GDP and wel a e, bu a nega i e impac on he economy’s ene gy-
in ensi e and ade-exposed sec o s. None o hese e ec s a e ound o be la ge, howe e ,
leading he au ho s o conclude ha CBAM is no a g ea conce n o Japan. Chen (2023) adop s
a dynamic CGE model o conside he impac o CBAM in he People’s Republic o China (PRC),
inding ha CBAM will educe he p ice o he PRC’s expo s and eal GDP, u he educing he
ca bon in ensi y o 18 a ec ed sec o s. These impac s a e es ima ed o be small, howe e .
Pe dana, Vielle, and Oli ei a (2023) conside he impac s o CBAM on B azil, inding ha CBAM
will imp o e he ade balance o B azil’s ene gy-in ensi e indus ies. This is because he ca bon
dioxide (CO2) con en o B azil’s ene gy-in ensi e indus ies is ela i ely low.
Beyond he e ec on p oduc ion, ade, and wel a e in o he economies, some li e a u e conside s
he impac s o CBAM on ca bon leakage and global emissions educ ions. UNCTAD (2021),
consis en wi h o he wo k (e.g., Bedna -F iedl, Schinko, and S eininge 2012; Böh inge ,
Ca bone, and Ru he o d e al. 2012; Pe dana and Vielle 2022), inds using a CGE model ha
CBAM is associa ed wi h educed ca bon leakage, as well as educ ions in emissions by EU
p oduce s and a shi in ading pa e ns owa d ela i ely ca bon e icien economies. Howe e ,
hei esul s u he indica e ha he emissions educ ion in esponse o he EU’s CBAM is limi ed;
esul s consis en wi h some o hose p esen ed in his pape .
3
A hi d se o s udies mo es beyond he ques ion o he impac o he EU’s CBAM and examines
whe he ex ending CBAM o o he economies will enhance he e ec i eness o he policy. Mo e
closely ela ed o he cu en pape , o example, is Pe dana and Vielle (2023). They adop a CGE
model bu , a he han ocus on he EU’s unila e al CBAM policy, examine he impac s o a clima e
club be ween he EU, US, and he PRC. Conside ing a coali ion o la ge economies implemen ing
a bo de ca bon adjus men , he au ho s ind—consis en wi h esul s in his pape — ha a
coali ion educes ca bon leakage, imp o es p oduc ion on ene gy-in ensi e indus ies, and
inc eases he club’s wel a e ela i e o ei he no CBAM o unila e al implemen a ion.
3. Me hodology
3.1. O e iew o he Economic Modelling
To es ima e he impac o he ETS and CBAM, we use a la ge-scale CGE model o he global
economy ha allows o an examina ion o sec o and mac oeconomic e ec s on di e en
economies and egions. We employ he CGE model de eloped in Bekke s and F ancois (2018)
and Bekke s, F ancois, and Rojas-Romagosa (2018), which includes mul iple economies,
mul iple sec o s, in e media e linkages, and mul iple ac o s o p oduc ion ha is calib a ed using
he Global T ade Analysis P ojec (GTAP) da abase.2 The app oach also allows o an es ima ion
o he impac o ETS and CBAM on emission pa e ns. This impac ollows om changes in he
mix o p oduc ion, he le el o o e all ac i i y, and how goods and se ices a e p oduced.
3.2. The CGE Model o Global P oduc ion and T ade
A CGE model is an ex ensi e economic amewo k ha allows o assessmen o he e ec s o
bo h he ETS and he CBAM on indus y, ansla ing hese e ec s in o na ional and global
economic impac s. I es ima es a ious economic changes, including shi s in alues, quan i ies,
and p ices ela ed o domes ic ac i i ies (such as ou pu and employmen ) and hei co esponding
ade lows. The model’s gene al equilib ium app oach allows o complex in e ac ions among
sec o s h ough supply linkages and ac o ma ke s, simula ing changes in speci ic economic
sec o s esul ing om he applica ion o ETS and CBAM.
A CGE model comp ises h ee key componen s: he gene al equilib ium economic model
(ma hema ical s uc u e), he mul i egional inpu -ou pu (MRIO) da a in eg a ed wi hin he model,
and a se o exogenous pa ame e s and a iables (like elas ici ies) ha guide endogenous
esponses. The in eg a ion o hese componen s c ea es a calib a ed gene al equilib ium
baseline, ul illing all accoun ing and ma ke -clea ing condi ions.
In his model, each egion has a single ep esen a i e composi e household ha alloca es
expendi u e be ween pe sonal consump ion and sa ings. This household owns p oduc ion ac o
endowmen s and ea ns income by selling hei endowmen s o i ms, along wi h income om a i
e enues and en s om impo /expo quo a licenses. Some o his income is dis ibu ed as
subsidy paymen s, p ima ily o he ag icul u e sec o .
The model’s s uc u e aligns closely wi h he s anda d GTAP model (Co ong e al. 2017),
enhanced by a mic o- ounded heo e ical model based on Ea on and Ko um’s (2002) ade
amewo k. The main dis inc ion is he inco po a ion o hei demand s uc u e, enabling he
de i a ion o he g a i y equa ion o es ima ing ade elas ici ies and changes in ade cos s
(Bekke s and F ancois 2018; Bekke s, F ancois, and Rojas-Romagosa 2018). This s uc u ally
2 Ve sion 11 wi h base yea 2017 (Aguia e al. 2019).
4
es ima ed model u ilizes ade elas ici ies de i ed om econome ic analysis o he unde lying
da a. Implemen a ion ollows he me hodologies laid ou by Bekke s, F ancois, and Rojas-
Romagosa (2018) and Bekke s e al. (2023), wi h ex ensions ha enable di ec es ima ion o
changes in g eenhouse gas emissions, ocusing pa icula ly on CO2.
The calib a ion o he model me ges ea u es o adi ional CGE models (Dixon and Jo genson
2013) wi h he mic o- ounda ions o con empo a y quan i a i e ade models (Cos ino and
Rod íguez-Cla e 2014). This means we u ilize he enhanced mic o- ounded Ea on and Ko um
(2002) s uc u e o model ade linkages, alongside s uc u ally es ima ed ade pa ame e s based
on a g a i y model ha de i es om he same s uc u al gene al equilib ium amewo k. As such,
ou s a e-o - he-a CGE model add esses ecen academic c i iques o s anda d CGE models,
ad oca ing o mic o- ounda ions g ounded in cu en ade heo ies and ensu ing ha key model
pa ame e s a e s uc u ally es ima ed om he same ounda ional da a (Bekke s e al. 2023;
Cos ino and Rod íguez-Cla e 2014).
In his s uc u al gene al equilib ium model, he economy is ep esen ed as a se ies o
simul aneous equa ions. I ca ego izes he en i e economy in o p oduc ion and consump ion
sec o s, which a e collec i ely modeled. P oduc ion sec o s a e in e connec ed in alue-added
chains, p og essing om aw ma e ials o he inal assembly o goods o households and
go e nmen s. These links a e se bo h bo de s and indus ies, including di ec connec ions (like
s eel used in anspo equipmen ) and indi ec links (such as he ela ionship be ween chemicals
and ag icul u e h ough e ilize s and pes icides). In addi ion, sec o s compe e o esou ces in
p ima y ac o ma ke s (capi al, labo , and land). The o e all concep ual amewo k o a egional
economy wi hin he GTAP class o s uc u al gene al equilib ium model is illus a ed in Figu e 1
and Figu e 2.3
Figu e 1: P oduc ion S uc u e in he CGE Model
CES = cons an elas ici y o subs i u ion, CGE = compu able gene al equilib ium.
Sou ce: Au ho s.
3 No e ha wi h he Ea on-Ko um speci ica ion, he CES unc ional o m has a di e en in e p e a ion in e ms o
pa ame e iza ion bu o he wise ollows he same basic s uc u e as in he diag ams. A key di e ence is ha impo s
and domes ic p oduc s compe e on he same le el. This co esponds echnically o a non-nes ed agg ega ion o impo s
and domes ic p oduc s. See Bekke s e al (2023).
11
Figu e 4: Pa e ns o Ca bon Dioxide In ensi y
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading
Sys em, MT CO2 = mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen ,
PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
4. The Es ima ed Impac o Ca bon P icing Scena ios
We u n nex o es ima ed esul s om he applica ion o ou gene al equilib ium model o he
scena ios de ined in Table 2. We i s discuss changes in emissions. We hen ocus on economic
e ec s. Full esul s a e epo ed in he appendix.
4.1. Emission Impac s
Table 4 and Figu e 5 p esen es ima ed changes in CO2 emissions ela i e o ou benchma k
da a. Compa ison o scena ios 1 and 2 illus a es he issue o ca bon leakage, which is he
a ionale o applica ion o CBAM in he i s place. In he i s speci ica ion, CO2 emissions a e
es ima ed o all by 358.1 million onnes o in esponse o an inc ease in he ca bon p ice o €100.
This e lec s a educ ion o 490.9 million onnes in he EU and OECD Eu ope4 and an inc ease o
132.8 million onnes in o he egions. This sugges s ha abou 27% o he emissions educ ion in
he EU is shi ed o o he egions. When in oducing CBAM, he o e all es ima ed educ ion in
emissions is la ge (418.1 million onnes). While he educ ion in emissions in he EU is oughly
simila (425.4 e sus 435.8 million onnes), he inc ease in emissions in o he egions unde
Scena io 2 is es ima ed o be smalle (62.4 e sus 132.8 million onnes), meaning ha he
es ima e o ca bon leakage d ops by 14 pe cen age poin s om 27% o 13%. While we s ill see
4 We add alues o OECD Eu ope o hose o he EU since some o he o me economies a e also pa o he EU
ETS.
0
2
4
6
8
10
12
14
0
200
400
600
800
1,000
1,200
1,400
1,600
OECD Asia
ADB Cen al and Wes Asia
Eas Asia
Sou h Asia
Sou heas Asia
Paci ic
PRC
India
Republic o Ko ea
Eu opean Union
OECD Eu ope
Eas e n Eu ope
No h Ame ica
La in Ame ica
Wes Asia and No h A ica
Sub-Saha an A ica
MT CO₂pe million $ alue added ( igh axis)
MT CO₂pe million $ alue added in manu ac u ing (le axis)
MT CO₂pe capi a ( igh axis)

12
an inc ease in emissions ou side he EU unde Scena io 2, global emissions a e subs an ially
lowe han unde Scena io 1, an e ec d i en almos en i ely by a educ ion in ca bon leakage.
While emissions educ ions a e subs an ially la ge wi h a ca bon p ice o €200 (scena ios 5 and
6), he pa e n o esul s is simila o ha o a ca bon p ice o €200. Global emissions educ ions
a e subs an ially la ge wi h CBAM han wi hou (624.5 e sus 749.8 million onnes), an e ec
d i en by educed ca bon leakage. Wi hou CBAM emissions educ ions in he EU and OECD
Eu ope a e abou 885 million onnes, while emissions elsewhe e inc ease by 261 million onnes,
a ca bon leakage a e o 29.4%. When CBAM is in oduced, howe e , he educ ion in emissions
in he EU is 867.6 million onnes, he inc ease elsewhe e 117.8 million onnes, and he ca bon
leakage a e 13.6%. The in oduc ion o CBAM hus educes he ca bon leakage a e by abou 16
pe cen age poin s.
The egions seeing he la ges inc ease in emissions in esponse o he highe p iced ETS and
CBAM in he EU end o be in No h Ame ica and egions ha a e geog aphically close o he EU
such as Eas e n Eu ope and Wes Asia and No h A ica. Wi hin Asia, ela i ely la ge inc eases
in emissions a e es ima ed o he PRC and India, and o a lesse ex en Cen al Asia and
Sou heas Asia.
Table 4: Changes in Ca bon Dioxide Emissions
Scena io
1
2
3
4
5
6
7
8
9
Regions
applying ETS
€100/MT CO2
€200/MT CO2
ETS
only
ETS and CBAM
ETS
only
ETS and CBAM
Eu ope
Eu op
e
All o
OECD
OECD
and Asia
Eu op
e
Eu op
e
All o
OECD
OECD
and Asia
CO
2
in ensi y
con e gen
ce
OECD Asia
5.7
5.3
-238.1
-192.2
10.7
10.2
-410.7
-327.6
-364.0
ADB Cen al
and Wes
Asia
4.2
2.1
11.2
-51.0
8.2
3.7
24.0
-108.6
-86.8
Eas Asia
2.2
1.4
6.3
-66.2
3.9
2.4
12.4
-116.4
-120.0
Sou h Asia
0.5
0.4
3.1
-10.2
1.0
0.6
6.2
-20.4
-26.0
Sou heas Asia
5.4
2.4
19.7
-147.1
9.9
4.2
39.1
-279.3
-350.2
Paci ic
0.1
0.0
0.0
0.3
0.2
0.0
0.1
0.7
-3.7
PRC
10.7
3.7
43.2
-1,429.3
18.7
5.5
88.1
-2,546.1
-3,094.1
India
11.6
7.1
30.5
-398.5
23.5
14.6
60.9
-723.8
-524.8
Republic o
Ko ea
2.5
1.7
-99.5
-80.4
4.7
3.2
-178.5
-144.3
-190.8
Eu opean Union
-435.8
-425.4
-395.4
-334.4
-777.2
-759.6
-706.7
-594.8
-642.8
OECD Eu ope
-55.1
-55.2
-50.8
-43.6
-107.9
-108.0
-100.6
-87.7
-92.7
Eas e n Eu ope
37.3
13.6
35.4
99.2
79.4
28.7
75.5
216.9
318.8
No h Ame ica
22.7
14.5
-659.8
-570.4
44.0
27.9
-1,240.1
-1,070.5
-1,268.7
La in Ame ica
4.4
1.6
10.5
36.7
8.6
3.0
22.1
78.4
34.2
Wes Asia and
No h A ica
18.2
4.6
45.6
154.6
33.6
6.4
94.1
335.1
184.0
Sub-Saha an
A ica
7.3
3.9
11.9
38.8
14.2
7.5
24.1
82.2
21.7
Wo ld, MT C0
2
-358.1
-418.1
-1,226.2
-2,993.7
-624.5
-749.8
-2,190.1
-5,306.3
-6,205.8
Wo ld, % CO
2
change
-1.1
-1.3
-3.7
-8.7
-1.9
-2.2
-6.4
-14.9
-17.2
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em,
MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and
De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
13
The emaining scena ios show ha b oadening he economy co e age o ETS- ype ca bon p icing
con ibu es o a subs an ial educ ion in CO2 emissions ela i e o he baseline. No su p isingly,
he highe ca bon p ice scena ios (€100 e sus €200) yield g ea e educ ions. When ex ending
ETS and CBAM o all o he OECD (scena ios 3 and 7), he educ ion in emissions is abou h ee
imes la ge han ha when ETS and CBAM is implemen ed in he EU only, while he educ ion is
mo e han se en imes la ge when also ex ending o Asian economies (scena ios 4 and 8). The
g ea es educ ions in emissions, howe e , a e unde Scena io 9, whe e we ha e modeled pa ial
con e gence o highe emission economies o a e age OECD emissions in ensi y by sec o .
Based on he esul s in he able, and as expec ed, he o e all educ ion in es ima ed annual
emissions is g ea e when he numbe o economies co e ed by ca bon p icing a e g ea es , and
when ca bon p ices a e highe . E ec i e ans e o exis ing echnology ( he s ylized con e gence
in Scena io 9) also con ibu es subs an i ely o CO2 educ ions. Howe e , none o his is enough
on i s own. Figu e 5 epo s he es ima ed global pe cen age educ ions in emissions in esponse
o each o hese policy in e en ions. The EU ETS and CBAM is es ima ed o educe global
emissions by abou 2% o less, depending on he ca bon p ice and whe he a CBAM is in oduced
o no . The es ima ed educ ions become g ea e when co e age is expanded, bu e en when all
OECD and Asia is included, and wi h a ca bon p ice o €200, emissions educ ions a e 15% a
mos . This inc eases o 17% once con e gence in emissions in ensi ies is allowed. Acco ding o
he IPCC, “global empe a u e will s abilise when ca bon dioxide emissions each ne ze o. Fo
1.5°C (2.7°F), his means achie ing ne ze o ca bon dioxide emissions globally in he ea ly 2050s;
o 2°C (3.6°F), i is in he ea ly 2070s … limi ing wa ming o a ound 2°C (3.6°F) s ill equi es
global g eenhouse gas emissions o peak be o e 2025 a he la es and be educed by a qua e
by 2030” (IPCC 2022). Unde lying global economic g ow h ends mean ha 4 yea s o endline
g ow h a e mo e han enough o undo he highes emissions educ ions modeled he e (scena ios
8 and 9). P ice incen i es unde exis ing indus ial echniques simply do no do enough. Inno a ion
and majo changes in he unde lying s uc u e o ene gy sys ems will be equi ed.
Figu e 5: Change in Global Ca bon Dioxide Emissions
CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em, MT CO2 = €100 pe mega onne
o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen .
Sou ce: Au ho s’ calcula ions based on model da abase.
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0
Eu ope
Eu ope
All o OECD
OECD and Asia
Eu ope
Eu ope
All o OECD
OECD and Asia
CO₂in ensi y con e gence
ETS
only
ETS and
CBAM
ETS
only ETS and CBAM
€100/MT CO₂€200/MT CO₂
%
14
4.2. Mac oeconomic E ec s
In his sec ion, we u n o es ima ed o e all mac oeconomic impac s o he a ious ca bon p icing
scena ios.
Es ima ed changes in GDP by economy and egion in esponse o enhanced ca bon p icing in
he EU a e summa ized in Figu e 6 (see Appendix Table A1 o ull esul s). The igu e shows ha
all economies and egions su e in e ms o GDP om he highe ETS p ice and he in oduc ion
o CBAM in he EU, wi h he nega i e e ec s inc easing as he p ice o ca bon ises. Reduc ions
a e es ima ed o be la ges o he EU and OECD Eu ope, wi h ela i ely la ge declines also
obse ed in economies and egions ha a e geog aphically close o he EU (e.g., Wes Asia and
No h A ica, Eas e n Eu ope, and ADB Cen al and Wes Asia). Globally, he enhancemen o
he EU’s ca bon p icing is expec ed o educe GDP by abou 0.5% a a p ice o €100 pe MT/CO2
and by abou 1.0% a a p ice o €200 pe MT/CO2. A he global le el, he di e ence in es ima ed
GDP educ ions be ween an ETS only and an ETS wi h CBAM is minimal, hough di e ences a e
mo e p onounced o some egions, speci ically hose ha a e mo e p oxima e o he EU.
Figu e 6: Na ional and Regional Changes in GDP in Response o
Ca bon P icing in he Eu opean Union
CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em, GDP = g oss domes ic p oduc ,
MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and
De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
-5.0 -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0
OECD Asia
ADB Cen al and Wes Asia
Eas Asia
Sou h Asia
Sou heas Asia
Paci ic
PRC
India
Republic o Ko ea
Eu opean Union
OECD Eu ope
Eas e n Eu ope
No h Ame ica
La in Ame ica
Wes Asia and No h A ica
Sub-Saha an A ica
Wo ld, % GDP change
%
200 €/MT CO₂, ETS and CBAM 200 €/MT CO₂, ETS Only
100 €/MT CO₂, ETS and CBAM 100 €/MT CO₂, ETS Only
15
Figu e 7 epo s es ima ed changes in GDP o he emaining scena ios ha in ol e an ex ension
o ca bon p icing o o he egions and con e gence in emissions in ensi ies. The i s hing o no e
is ha in compa ison o he esul s in Figu e 6, he GDP impac s in he EU a e lowe when ca bon
p icing is expanded o o he egions, such ha he b oade he economy co e age, he lowe he
cos s o global emissions educ ions ca ied by Eu ope (as a pe cen o GDP). A he same ime,
he c oss- egion pa e n o GDP e ec s a ies subs an i ely ac oss scena ios. Eas Asia,
Sou heas Asia, and Sou h Asia (excluding India), o example, a e all hu as measu ed by GDP
unde he b oades and mos ambi ious ca bon p icing scena io (Scena io 8), while o he egions
ou side o Asia o en bene i . Howe e , wi h ou scena io inco po a ing pa ial echnical
con e gence o OECD ca bon e iciency p o iles, he impac becomes one o subs an ial GDP
gains.
Figu e 7: Na ional and Regional Changes in GDP in Response o Ca bon P icing,
OECD and Asia
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em,
MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen ,
PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
-10 -5 0 5 10 15 20
OECD Asia
ADB Cen al and Wes Asia
Eas Asia
Sou h Asia
Sou heas Asia
Paci ic
PRC
India
Republic o Ko ea
Eu opean Union
OECD Eu ope
Eas e n Eu ope
No h Ame ica
La in Ame ica
Wes Asia and No h A ica
Sub-Saha an A ica
Wo ld, % GDP change
%
CO₂in ensi y con e gence €200/MT CO₂, OECD and Asia
€200/MT CO₂, All OECD €100/MT CO₂, ETS and CBAM, OECD and Asia
€100/MT CO₂, All OECD
16
The example o hese Asian economies and egions also highligh s how some economies may
su e om he enhanced ca bon p icing in he EU bu may gain when CBAM is ex ended o o he
OECD economies. This p esumably a ises because some p oduc ion om he OECD is shi ed
o Asia. This hin s a he possibili y o a ee- ide p oblem: in an en i onmen o expanding ca bon
p icing, he e may be an incen i e o some egions o no engage in ca bon p icing, since as
o he s join ca bon p icing ini ia i es hey may gain om he ealloca ion o p oduc ion.
The c oss-economy pa e n o economic e ec s ha eme ges om hese scena io es ima es
ein o ces ano he message o ecen IPCC epo s. In he scena ios spelled ou he e, we see
ha in some cases he po en ial impac s o mi iga ion ac ions h ough domes ic and ade- ela ed
ca bon axes may all disp opo iona ely on poo e egions. The speci ic pa h ollowed o each
emission educ ions has impo an implica ions o he GDP impac ac oss lowe e sus highe
income economies, wi h implemen a ion choices (including ans e o exis ing and new
echnologies) he e o e being c i ical in his ega d (IPCC 2018).
Tables 5 and 6 decompose he ou pu changes by egion o hose occu ing in ETS and non-ETS
sec o s. Ou side he EU and OECD Eu ope, he highe p iced ETS in he EU—ei he €100 o
€200/MT—is es ima ed o educe ou pu in non-ETS sec o s and inc ease i in ETS sec o s. Such
esul s sugges ha he highe EU ca bon p ice leads o ca bon leakage o ETS sec o s o o he
economies, wi h he nega i e income e ec o he highe ca bon p ice educing ou pu in non-ETS
sec o s ac oss he di e en egions. Resul s a e simila when in oducing CBAM in he EU, hough
wi h somewha smalle posi i e (nega i e) e ec s on ou pu in ETS sec o s in o he egions ( he
EU).
Ex ending he ETS and CBAM o o he egions is es ima ed o ha e a ied e ec s on o he
egions. In mos cases, howe e , he ex ension o ETS and CBAM o he OECD and o Asia leads
o inc eases in ou pu in bo h ETS and non-ETS sec o s in o he egions, sugges ing he p esence
o ca bon leakage in ETS sec o s, bu also he shi o downs eam p oduc ion o egions no
co e ed by ca bon p icing.
Table 5: Na ional and Regional GDP Impac s o Ca bon P icing by Sec o Type,
€100/MT CO2 (%)
€100/MT CO2
ETS only
ETS and CBAM
Region applying policy
Eu ope
Eu ope
All o OECD
OECD and Asia
Region ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
OECD Asia 0.3 -0.2 0.2 -0.1 -4.9 -1.3 -1.8 0.1
ADB Cen al and Wes Asia 0.5 -0.4 0.1 -0.4 1.6 0.4 -1.2 0.8
Eas Asia 0.5 -0.2 0.2 -0.2 1.3 0.1 -4.3 -0.6
Sou h Asia 0.1 -0.2 0.0 -0.2 0.9 0.5 -2.5 0.2
Sou heas Asia 0.5 -0.3 0.2 -0.3 1.5 0.1 -1.8 -0.1
Paci ic 0.6 -0.3 0.2 -0.3 1.3 -0.7 3.8 -0.2
PRC 0.3 -0.1 0.2 -0.1 0.9 0.1 -4.7 -1.7
India 0.4 -0.1 0.3 -0.1 1.1 0.3 -7.9 -1.5
Republic o Ko ea 0.4 -0.2 0.2 -0.1 -7.3 -1.9 -4.2 -0.4
Eu opean Union -5.8 -1.4 -5.3 -1.5 -4.4 -1.1 -2.4 0.4
Con inued on he nex page

17
€100/MT CO2
ETS only
ETS and CBAM
Region applying policy
Eu ope
Eu ope
All o OECD
OECD and Asia
Region ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
OECD Eu ope -4.0 -0.5 -3.8 -0.6 -3.0 -0.5 -1.2 0.1
Eas e n Eu ope 1.6 -0.5 0.6 -0.5 1.7 -0.1 4.7 1.5
No h Ame ica 0.5 -0.2 0.3 -0.1 -3.9 -0.5 -2.0 1.0
La in Ame ica 0.5 -0.2 0.3 -0.2 1.3 0.1 3.8 1.1
Wes Asia and No h A ica 0.9 -0.5 0.3 -0.5 2.0 0.0 6.3 1.7
Sub-Saha an A ica 1.2 -0.3 0.7 -0.3 2.0 0.0 5.7 1.0
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em,
MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and
De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
Table 6: Na ional and Regional GDP Impac s o Ca bon P icing by Sec o Type,
€200 /MT CO2 (%)
€200/MT CO2
ETS only
ETS and CBAM
Region applying
policy Eu ope Eu ope All o OECD OECD and Asia CO2 in ensi y
con e gence
Region ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
ETS
sec o s
non-
ETS
sec o s
OECD Asia 0.5 -0.3 0.4 -0.3 -9.9 -3.2 -3.9 -0.1 -7.8 -0.9
ADB Cen al and
Wes Asia
0.9 -0.9 0.2 -0.9 3.5 1.1 -4.2 0.5 21.0 6.4
Eas Asia 1.0 -0.5 0.5 -0.4 2.8 0.3 -8.9 -2.3 -6.8 0.3
Sou h Asia 0.3 -0.5 -0.1 -0.4 2.1 1.1 -5.1 0.1 -7.0 1.9
Sou heas Asia 0.9 -0.6 0.3 -0.6 3.1 0.3 -4.6 -1.0 6.2 2.8
Paci ic 1.2 -0.6 0.5 -0.7 3.0 -1.3 8.8 -0.3 1.9 2.6
PRC 0.5 -0.2 0.3 -0.1 1.8 0.2 -10.3 -4.4 6.1 2.9
India 0.7 -0.2 0.6 -0.2 2.2 0.5 -15.6 -3.9 6.6 3.2
Republic o Ko ea 0.7 -0.4 0.3 -0.3 -14.2 -4.2 -8.1 -1.3 -11.5 0.2
Eu opean Union -11.8 -3.4 -11.0 -3.7 -9.1 -2.7 -5.1 0.4 -9.5 -0.1
OECD Eu ope -8.4 -1.4 -8.0 -1.7 -6.3 -1.4 -2.8 -0.1 -8.2 -0.1
Eas e n Eu ope 3.4 -0.9 1.2 -1.0 3.4 0.1 10.1 3.7 37.7 7.9
No h Ame ica 1.0 -0.3 0.6 -0.3 -8.1 -1.2 -4.0 1.9 -1.9 1.5
La in Ame ica 0.9 -0.4 0.5 -0.4 2.7 0.2 8.0 2.6 1.1 1.8
Wes Asia and No h
A ica
1.6 -1.0 0.5 -1.0 4.2 0.1 13.8 4.3 4.0 2.8
Sub-Saha an A ica 2.2 -0.6 1.2 -0.6 3.9 0.2 11.6 2.5 1.8 1.5
ADB = Asian De elopmen Bank, ETS = Emissions T ading Sys em, MT CO2 = €100 pe mega onne o ca bon
dioxide, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
18
Tu ning o he es ima ed impac s on expo s, Figu e 8 epo s in o ma ion on he es ima ed impac
o ca bon p icing scena ios in he EU on expo s o he di e en egions. Unde all scena ios
expo s o all egions a e es ima ed o decline. As expec ed, he es ima ed declines a e la ge in
he EU and OECD Eu ope, and close o 6% in he mos s ingen case in he EU. In o he egions,
declines a e es ima ed o be la ge in hose egions close o he EU, including Cen al and Wes
Asia, Eas e n Eu ope, and Wes Asia and No h A ica. On a e age, expo s decline by 1% in he
case o he highe p iced ETS o €100/MT, wi h he a e age decline being 2.7% in he case o an
ETS and CBAM o €200/MT.
Figu e 8: Es ima ed Impac o EU ETS and CBAM on Expo s by Region
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em,
EU = Eu opean Union, MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-
ope a ion and De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
-7 -6 -5 -4 -3 -2 -1 0
OECD Asia
ADB Cen al and Wes Asia
Eas Asia
Sou h Asia
Sou heas Asia
Paci ic
PRC
India
Republic o Ko ea
Eu opean Union
OECD Eu ope
Eas e n Eu ope
No h Ame ica
La in Ame ica
Wes Asia and No h A ica
Sub-Saha an A ica
%
€200/MT CO₂, ETS and CBAM €200/MT CO₂, ETS Only
€100/MT CO₂, ETS and CBAM €100/MT CO₂, ETS Only
19
Ex ending he ETS and CBAM o he OECD and Asia esul s in la ge a e age educ ions in
expo s (Figu e 9). On a e age, expo s decline by 2% when ex ending ETS and CBAM o he
OECD a €100/MT, wi h he decline being 3.8% o he same scena io a a p ice o €200/MT and
3.1% when expanding o Asian economies a a p ice o €200/MT. Declines end o be la ge in
hose egions ha implemen ca bon p icing, wi h he declines deepening as he p icing becomes
mo e s ingen . The e a e excep ions, howe e , wi h he ex ension o ca bon p icing o Asia
leading o inc eases in expo s in Sou h Asia.
Figu e 9: Es ima ed Impac o ETS and CBAM Ex ended o he OECD and Asia
on Expo s by Region
ADB = Asian De elopmen Bank, CBAM = Ca bon Bo de Adjus men Mechanism, ETS = Emissions T ading Sys em,
MT CO2 = €100 pe mega onne o ca bon dioxide, OECD = O ganisa ion o Economic Co-ope a ion and
De elopmen , PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
-10 -5 0 5 10 15
OECD Asia
ADB Cen al and Wes Asia
Eas Asia
Sou h Asia
Sou heas Asia
Paci ic
PRC
India
Republic o Ko ea
Eu opean Union
OECD Eu ope
Eas e n Eu ope
No h Ame ica
La in Ame ica
Wes Asia and No h A ica
Sub-Saha an A ica
%
CO₂in ensi y con e gence 200 €/MT CO₂, All OECD and Asia
200 €/MT CO₂, All OECD 100 €/MT CO₂, ETS and CBAM, All OECD and Asia
100 €/MT CO₂, All OECD
20
Finally, we conside global changes in sec o ade olumes in esponse o he ca bon p icing
scena ios (Table 7). The esul s sugges ha expo olume declines a e likely o be la ge in
sec o s ha a e emissions in ensi e, including Elec ici y, Pe ochemicals, Mine al p oduc s,
T anspo , Mining, and Fe ous me als. The case o Gas dis ibu ion is in e es ing, wi h expo
olumes es ima ed o inc ease wi h an ETS in he EU only, bu see ela i ely la ge declines once
CBAM is implemen ed.
Table 7: Change in Sec o al Wo ld T ade Volumes (%)
€100/MT CO2
€200/MT CO2
ETS
only
ETS and CBAM
ETS
only
ETS and CBAM
Sec o s Eu ope Eu ope
All o
OECD
OECD
and Asia
Eu ope Eu ope
All o
OECD
OECD
and Asia
CO
2
in ensi y
con e gence
Ag icul u e, o es y,
ishing
-1.2
-1.3
-1.2
-1.6
-2.6
-2.7
-3.0
-3.9
2.1
Mining
-2.8
-2.5
-4.8
-9.5
-5.1
-4.6
-8.0
-16.1
-19.8
Food
-1.0
-1.2
-1.2
-0.5
-2.6
-2.8
-2.9
-1.5
-0.3
Tex iles
-0.9
-1.0
-1.0
-0.3
-2.1
-2.2
-2.4
-0.5
-2.3
Wood
-2.1
-2.4
-2.4
-1.2
-4.5
-5.2
-5.3
-2.9
-0.7
Chemicals, ubbe ,
plas ics
-2.0
-2.6
-3.1
-1.8
-4.1
-5.3
-6.3
-4.0
-0.6
Pha maceu icals
-0.6
-1.0
-0.8
0.6
-1.5
-2.2
-2.0
1.9
3.0
Fe ous me als
-2.2
-3.1
-4.2
-1.8
-4.5
-6.3
-8.0
-2.4
15.6
Non e ous me als
-1.6
-2.3
-2.4
3.3
-3.3
-4.7
-4.9
5.0
-8.6
Me al p oduc s
-1.6
-1.9
-1.7
-2.2
-3.5
-4.2
-3.6
-4.7
2.6
Mine al p oduc s nec
-2.6
-5.0
-7.3
-3.4
-5.2
-9.5
-13.0
-6.2
-3.7
Compu e , elec onic
and op ic
-0.8
-1.0
-1.0
-0.5
-1.9
-2.1
-2.3
-1.2
1.9
Machine y and
equipmen nec
-1.2
-1.5
-1.5
-0.1
-2.7
-3.3
-3.2
-0.4
0.9
Mo o ehicles
-1.1
-1.3
-1.4
0.1
-2.5
-2.9
-3.2
0.0
0.7
Mo o ehicles and
pa s
-1.0
-1.3
-1.2
0.3
-2.3
-3.0
-2.7
0.5
1.7
Manu ac u es nec
-1.1
-1.2
-1.5
-0.4
-2.5
-2.8
-3.4
-1.1
-0.8
Cons uc ion
-0.7
-0.9
-0.5
0.4
-1.6
-2.1
-1.0
0.8
3.1
Pe ochemicals, coal
p oduc s
-2.3
-3.8
-6.2
-6.5
-4.6
-7.4
-11.8
-12.9
-14.3
Elec ici y
-2.4
-9.2
-10.1
-8.9
2.3
-13.1
-14.4
-11.0
-11.6
Gas manu ac u e,
dis ibu ion
1.7
-5.1
-8.1
-14.0
12.7
-0.6
-5.9
-13.0
-17.4
T anspo nec
-1.4
-3.1
-4.1
-3.3
-2.5
-5.9
-7.7
-6.2
-3.0
Comme cial se ices
-0.8
-0.9
-0.7
0.3
-1.9
-2.1
-1.8
0.5
1.4
Public se ices
-0.4
-0.5
0.1
-0.1
-0.8
-1.0
0.4
-0.2
5.7
ADB = Asian De elopmen Bank, ETS = Emissions T ading Sys em, MT CO2 = €100 pe mega onne o ca bon dioxide,
nec = no elsewhe e classi ied, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen , PRC = People’s
Republic o China.
Sou ce: Au ho s’ calcula ions based on model da abase.
ASIAN DEVELOPMENT BANK
ASIAN DEVELOPMENT BANK
6 ADB A enue, Mandaluyong Ci y
1550 Me o Manila, Philippines
www.adb.o g
MODELING THE IMPACT
OF CARBON BORDER POLICIES
ON EMISSIONS, GLOBAL VALUE
CHAINS, AND WELFARE
Joseph F ancois and Neil Fos e -McG ego
ADB ECONOMICS
WORKING PAPER SERIES
NO. 792
July 2025
Modeling he Impac o Ca bon Bo de Policies on Emissions,
Global Value Chains, and Wel a e
This pape employs a compu a ional gene al equilib ium model o es ima e he impac o bo de ca bon
adjus men (BCA) policies on emissions and economic pe o mance. Resul s sugges ha while an expanded
scheme o ca bon p ices and BCAs can educe emissions, unde lying g ow h ends quickly undo he highes
emissions educ ions modeled. Resul s also sugges ha in some cases he po en ial impac s o mi iga ion
ac ions h ough domes ic and ade- ela ed ca bon axes may all disp opo iona ely on poo e egions.
Abou he Asian De elopmen Bank
ADB is a leading mul ila e al de elopmen bank suppo ing inclusi e, esilien , and sus ainable g ow h ac oss
Asia and he Paci ic. Wo king wi h i s membe s and pa ne s o sol e complex challenges oge he , ADB
ha nesses inno a i e inancial ools and s a egic pa ne ships o ans o m li es, build quali y in as uc u e,
and sa egua d ou plane . Founded in 1966, ADB is owned by 69 membe s—50 om he egion.