Loading...

Economic Impacts of Carbon Border Adjustment Mechanisms: The Case of Iran's Petrochemical Industry

Sabzevari, Ahmad Reza | 2026

3 Viewed
  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 58888 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Talebian, Masoud; Khajehpour, Hossein
  7. Abstract:
  8. Climate change and the consequences arising from greenhouse gas emissions rank among the most pressing challenges of the twenty-first century, compelling governments and international institutions to undertake urgent and coordinated action. The global community has sought to redirect development pathways toward emission reduction and a low-carbon transition through regulatory frameworks and market-based instruments. Nevertheless, national climate policies continue to face structural challenges, most notably carbon leakage. This phenomenon manifests in two principal forms: first, the relocation of energy- and emission-intensive industries from jurisdictions with stringent climate regulations to those with more lenient standards; and second, an increase in fossil fuel consumption in unregulated economies, driven by reduced demand in regulated countries and the consequent decline in global energy prices. In practice, both mechanisms may undermine the environmental effectiveness of domestic climate policies while imposing additional pressures on industrial competitiveness. In response, many countries have introduced policy instruments designed to reconcile environmental objectives with the protection of national economic interests. One of the most prominent approaches involves the application of border-adjusted carbon pricing to both domestic production and imported goods, thereby ensuring a level playing field. In this regard, the Carbon Border Adjustment Mechanism (CBAM) of the European Union represents a landmark initiative. Although currently in its transitional phase, its scope and sectoral coverage are gradually expanding. A distinguishing feature of this mechanism is that imports originating from countries with an established domestic carbon pricing system may be exempt from additional carbon charges upon entry into the EU, thereby reducing the risk of double taxation. This design is expected to encourage other countries to adopt comparable carbon pricing frameworks. One of the most significant vulnerabilities facing Iranian firms in the coming years is the projected contraction of profit margins—particularly in energy-intensive industries such as petrochemicals—stemming from the global implementation of greenhouse gas mitigation policies and climate-related trade measures. This study first assesses the implications of such policies for companies listed on the Iranian capital market, estimating the potential reduction in profit margins and evaluating their ability to sustain operations under emerging regulatory constraints. It then provides an in-depth analysis of Iran’s petrochemical industry—one of the country’s principal export sectors—and examines its prospective development pathway in light of evolving international climate and trade requirements
  9. Keywords:
  10. Climate Change ; Tehran Stock Exchange ; Petrochemical Industries ; Carbon Leakage ; Emission Trading System ; Carbon Border Adjustment Mechanism (CBAM)

 Digital Object List

 Bookmark

No TOC