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A large number of US economists have signed a Statement on Carbon Dividends, advocating a revenue neutral carbon tax as the best policy measure to reduce carbon emissions and so mitigate climate change. The statement also advocates (para IV) a border carbon adjustment system to ensure that such a carbon tax would not encourage carbon leakage (ie transfer of production to another country with a laxer carbon regime) and damage US competitiveness.

What are good sources explaining how a border carbon adjustment system might work, the pros and cons of such a system, and lessons from attempts (if any, anywhere in the world) to operate such a system?

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