International Congress on Eurasian Economies
15-17 May 2025 – Konya - TÜRKİYE
Paper properties
Paper ID : 2973
Status : Paper submitted to journal
Language : Turkish
Topic : International Trade and Globalization
Presenter: Dr. Burak Beder
Session : 1B Büyüme
The Impact of The Carbon Border Adjustment Mechanism on the Competitiveness of the Industrial Sector: Comparative Analysis of Türkiye and European Union Countries
Sınırda Karbon Düzenleme Mekanizmasının Sanayi Sektörünün Rekabetçiliği Üzerindeki Etkisi: Türkiye ve Avrupa Birliği Ülkelerinin Karşılaştırmalı Analizi
- Dr. Burak Beder (Doğuş University, Türkiye)
Abstract
The European Union (EU) has introduced carbon border adjustment mechanism (CBAM) to decarbonize economic growth and to realize green economic transformation by preserving the competitiveness of firms. The CBAM causes companies that export to the EU to incur costs in proportion to the carbon emissions contained in their products and are exposed to a tax similar to tariff. In this context, it is estimated that the competitiveness of firms exporting to the EU will be adversely affected by having to bear the costs of greenhouse gas emissions. The aim of this study is to calculate the carbon emission costs that the Turkish industrial sector might bear because of CBAM and to determine how the CBAM affects the competitiveness of the Turkish industrial sector vis-à-vis EU countries. In this study, foreign trade data between 2015 and 2020 were provided from the Eurostat database and the data on embedded emissions in export products were provided from the OECD database. The methodology was based on both revealed comparative advantage (RCA) method and EU legal regulations. The RCA indexes of Türkiye's industrial sector before and after the CBAM were calculated and compared with the RCA indexes of EU countries, and the tax equivalent of the carbon cost due to CBAM was estimated that Türkiye's industrial sector might be incurred. Consequently, our findings show that the Turkish Industry sector may incur a carbon cost of EUR 3.539 billion due to CBAM, and the tax equivalent of this cost would be 8.7%.
JEL codes: F10, F18, F13
