3. International cooperation guts solvency
Ambec 22 (Stefan, is INRAE Research Professor at Toulouse School of Economics where he leads the TSE Energy and Climate Center. 07-06-2022 “Impact and challenges of carbon border adjustments” https://www.tse-fr.eu/impact-and-challenges-carbon-border-adjustments)//BH-NB//
The effectiveness of carbon price in reducing greenhouse gas emissions through carbon leakage is undermined due to a lack of global coordination combined with international trade. Carbon pricing aims at incentivizing firms to curb their own emissions by assigning a value to each ton of carbon dioxide emitted. Carbon can leak if local production is moved abroad in a country with lower carbon price or substituted by imports from this country. Carbon leakage does not only harm the economy (employment, profits, tax collected including through carbon pricing) but also harms our climate since the emission reductions targeted by carbon tax, or the cap on pollution allowances, are not met.