Cover IMF Working Papers
Buy Book in Print
Climate Change Mitigation and Policy Spillovers in the EU’s Immediate Neighborhood
Author:
Mr. Serhan Cevik
Search for other papers by Mr. Serhan Cevik in
Current site
Google Scholar Close
https://orcid.org/0000-0002-2373-2023
,
Mr. Nadeem Ilahi
Search for other papers by Mr. Nadeem Ilahi in
Current site
Google Scholar Close
,
Mr. Krzysztof Krogulski https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Krzysztof Krogulski in
Current site
Google Scholar Close
,
Ms. Grace B Li
Search for other papers by Ms. Grace B Li in
Current site
Google Scholar Close
,
Sabiha Mohona
Search for other papers by Sabiha Mohona in
Current site
Google Scholar Close
, and
Yueshu Zhao
Search for other papers by Yueshu Zhao in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 246
Language:
English
Publication Date:
01 Dec 2023
DOI:
https://doi.org/10.5089/9798400259401.001
ISBN:
9798400259401
ISSN:
1018-5941
Pages:
39
Keywords:
Climate change; carbon emissions; climate change mitigation; carbon tax; Europe; EU mitigation policy; EUN country; policy spillover; neighborhood country; Greenhouse gas emissions; Climate policy; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (2.9 MB) Download Epub
EU’s neighborhood countries (EUN) have lagged the EU on emissions mitigation; coal-heavy power generation and industrial sectors are a key factor. They have also trailed EU countries in emissions mitigation policies since 2000, with little use of market-based instruments, and they still have substantial fossil fuel subsidies. Increasingly stringent EU mitigation policies are asociated with lower emissions in EUN. Overall output effects of the CBAM, in its current form, would be limited, though exports and emissions-intensive industries could be heavily impacted. A unilaterally adopted economywide carbon tax of $75 per ton would significantly lower emissions by 2030, with minimal consequences for output or household welfare, though a safety net for the affected workers may be necessary. To become competitive today by attracting green FDI and technology, overcoming infrastructure constraints and integrating into EU’s supply chains, EUN countries would be well served to front load decarbonization, rather than postpone it for later.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund