Measuring the Cost of the European Union’s Carbon Border Adjustment Mechanism on Moroccan Exports
Round 1
Reviewer 1 Report
Comments and Suggestions for AuthorsThe paper presents an interesting analysis of the potential impacts of CBAM on Morocco, highlighting the country's dependence on sales to the EU. The paper is well-written and does not have any problems in terms of clarity, applying a well-established analytical framework to the country's context. However, the main issue with the paper is the level of sectoral aggregation used in estimating carbon intensity and trade.
Regarding GHG emissions, data is not available at a more disaggregated level in Morocco's National Communication (NC) 4, which justifies the choice of using sectoral (rather than product-level) information. Nevertheless, the authors could use other data sources to complement this, such as the satellite accounts of the GLORIA MRIO table (Lenzen et al., 2023), which provide GHG emissions at a more disaggregated level.
The primary concern, however, is the level of aggregation of trade data. Product-level data is available in many databases (for example, the COMTRADE data or the compilation made by The Growth Lab at Harvard University (2019)), and because CBAM targets products rather than industries, one can obtain precise information on Morocco's exports to the EU for products within the correct HS Classification. Many studies, such as Magacho et al. (2024), present more detailed analyses on trade and emissions to the EU by country and product (specific to the HS classification of CBAM). These improvements are essential to ensure that the paper is suitable for publication.
References: Lenzen, M., Geschke, A., West, J., Fry, J., Malik, A., Giljum, S., ... & Schandl, H. (2023). GLORIA MRIO. The Growth Lab at Harvard University. (2019). “Growth Projections and Complexity Rankings, V2” International Trade Data (HS and SITC). https://doi.org/10.7910/dvn/xtaqmc Magacho, G., Espagne, E., & Godin, A. (2024). Impacts of the CBAM on EU trade partners: consequences for developing countries. Climate Policy, 24(2), 243-259.
Author Response
Referee 1
1.a. However, the main issue with the paper is the level of sectoral aggregation used in estimating carbon intensity and trade.
Regarding GHG emissions, data is not available at a more disaggregated level in Morocco's National Communication (NC) 4, which justifies the choice of using sectoral (rather than product-level) information.
Nevertheless, the authors could use other data sources to complement this, such as the satellite accounts of the GLORIA MRIO table (Lenzen et al., 2023), which provide GHG emissions at a more disaggregated level.
In the corrected version, we use data from EORA26 MRIO, it made more sense to us because the database provides the carbon footprint for 26 sectors, and our SUT (and therefore our input output matrix) has 20 sectors. The correpondance between sectors was made via simple mapping of sectors using Haddad et al (2020).
1.b. The primary concern, however, is the level of aggregation of trade data.
Product-level data is available in many databases (for example, the COMTRADE data or the compilation made by The Growth Lab at Harvard University (2019)), and because CBAM targets products rather than industries, one can obtain precise information on Morocco's exports to the EU for products within the correct HS Classification. Many studies, such as Magacho et al. (2024), present more detailed analyses on trade and emissions to the EU by country and product (specific to the HS classification of CBAM). These improvements are essential to ensure that the paper is suitable for publication.
The level of aggregation of the Moroccan SUT (and therefore to our input-output table ) does not allow for a more detailed analysis as it is only available with 20 sectors/products. In the original version of the manuscript, we used data from ICT’s Trade Map to obtain information about Morocco’s exports to the EU by product within 2 digits of the HS classification. In this version, as suggested, we recomputed our results by using the same database at a more deaggregated level (4 digits) following this recommendation to obtain more precise data. Furthermore, we relied on Magacho et al. (2024) to specify the exact products targeted by CBAM.
ICT’s Trade Map provides the list of products exchanged in detail (up to 6digits ) in the HS system, and triangulates its data using UN COMTRADE and the Moroccan office of exchange (the administration responsible for monitoring foreign trade) which gives us a good level of confidence in the quality of the data.
References: Lenzen, M., Geschke, A., West, J., Fry, J., Malik, A., Giljum, S., ... & Schandl, H. (2023). GLORIA MRIO. The Growth Lab at Harvard University. (2019). “Growth Projections and Complexity Rankings, V2” International Trade Data (HS and SITC). https://doi.org/10.7910/dvn/xtaqmc Magacho, G., Espagne, E., & Godin, A. (2024). Impacts of the CBAM on EU trade partners: consequences for developing countries. Climate Policy, 24(2), 243-259.
Reviewer 2 Report
Comments and Suggestions for AuthorsThe issue of reducing the carbon footprint of the European Union's Green Deal is an important topic at the moment.
Comments:
Row 224 greenhouse gas emission figures are from 2018. It is 2024. Has more recent data not been made available?
How has the trajectory of greenhouse gas emission data changed over a longer period?
Has the trend been downward or upward?
Similarly for other data e.g. Table 3 year 2019
In the calculation and scenario building (Row 298), the authors focused only on data from these years. This section could be expanded to include calculations and scenarios based on the expanded input data. These input data could be predicted in the next few years as the country's industry changes and evolves.
Author Response
Referee 2:
Remark:
2.a. Row 224 greenhouse gas emission figures are from 2018. It is 2024. Has more recent data not been made available?
The latest data available are from 2019, using the EORA26 MRIO database. we used this data in the revised version of the manuscript to adjust our calculations.
2.b. How has the trajectory of greenhouse gas emission data changed over a longer period?
Has the trend been downward or upward?
In their analysis, Ben Azzeddine et al. (2024) conducted a thorough examination of the link between economic growth and greenhouse gas emissions in Morocco. Using cointegration analysis, they identified a significant and lasting connection between GDP and greenhouse gas emissions, indicating a strong correlation between the two variables. Their regression model provided a quantification of this connection, indicating that a 1% increase in GDP results in a 0.83% increase in greenhouse gas emissions in the long term. Additionally, the researchers calculated the decoupling index for the period from 1990 to 2018, which revealed a limited decoupling between overall greenhouse gas emissions and economic growth. Conversely, the study found that CO2 emissions displayed a growing coupling with GDP, suggesting an increasing interdependence between carbon dioxide emissions and economic expansion during the analyzed time period.
We added a paragraph to explain this at line 486 to 493.
2.c. Similarly for other data e.g. Table 3 year 2019
In the calculation and scenario building (Row 298), the authors focused only on data from these years. This section could be expanded to include calculations and scenarios based on the expanded input data. These input data could be predicted in the next few years as the country's industry changes and evolves.
although the latest SUT table available is from 2020, we used data from 2019 for the results not to be altered by the pandemic’s effects. This should not pose a problem as Morocco witnesses a relatively slow but steady growth. Indeed, SUT data for 2015, 2017, 2018 and 2019 showcase a stable structure of the economy. The only sector witnessing a relative growth rate of its share in the total output is the automobile sector, a non/carbon intensive industry.
In fine, the advancements in production technology have remained relatively stagnant over the past few years, with 2019 data being the most recent and reliable information currently accessible for SUT and carbon data.
Reviewer 3 Report
Comments and Suggestions for AuthorsDear Authors,
the presented manuscript is (in my opinion) interesting and in line with current trends in substantive discussions in the EU.
Your assessment of the EU's ETS system is accurate. However, the question must be asked:
Is it profitable for Morocco to implement emission pricing systems for the product (production) chain? or maybe it is better to leave the necessity of imposing customs duties (additional fees) by the EU (during export)?
My comments/remarks:
1. check the publisher's guidelines whether you can make references in the form of entries in the "footer"
2. all tables and charts should be legible and made in accordance with the publisher's guidelines. Tables cannot be images inserted from a calculation program.
3. attachments with additional data, despite being enlarged, are not legible, not all descriptions are in English. It should either be corrected or consideration should be given to deletion
This manuscript is worth improving to be published
Kind regards
reviewer
Author Response
Referee 3:
3.a. Is it profitable for Morocco to implement emission pricing systems for the product (production) chain? or maybe it is better to leave the necessity of imposing customs duties (additional fees) by the EU (during export)?
In fact, we added a couple of sentence to provide insights on this in line 516 yo 520. Summarizing that the cost would be much greater for the Moroccan economy to apply a national carbon tax on targeted products.
3.b. check the publisher's guidelines whether you can make references in the form of entries in the "footer"
We removed the footers.
3.c. all tables and charts should be legible and made in accordance with the publisher's guidelines. Tables cannot be images inserted from a calculation program.
We did this.
3.d. attachments with additional data, despite being enlarged, are not legible, not all descriptions are in English. It should either be corrected or consideration should be given to deletion.
Attachements have been deleted.
Reviewer 4 Report
Comments and Suggestions for AuthorsDear Authors,
Your work is very interesting. However, there are some points where it could be improved. Please consider the following.
1. Line 49. I suggest to present shortly the relevant literature and the state of the art scientific research about CBAM and “Fit for 55”.
2. It is not usual for this journal to include footnotes – please confirm with the editorial office.
3. Paragraph 3.1 – I suggest to include a brief literature review about the latest applications of the input-output framework. Moreover, the presentation of the scientific background has to be improved.
4. It is not clear how the data included in table 1, were calculated. I suggest to explain it further. Explain also what is DH.
5. I suggest to use USD in all cases (instead of $).
6. The resolution (quality) of figure 1, table 6 and figure 2, as well for the tables included in appendices A & B must be improved.
7. The similarity index of the manuscript according to the iThenticate report is 14%. I suggest to review the manuscript and ensure the originality of the content.
8. The reference style used in the manuscript has to be as required by the journal.
Comments on the Quality of English LanguageLanguage improvement is needed. I suggest the authors to review English language and style once again.
Author Response
Referee 4:
Your work is very interesting. However, there are some points where it could be improved. Please consider the following.
4.a. Line 49. I suggest to present shortly the relevant literature and the state of the art scientific research about CBAM and “Fit for 55”.
relevant Scientific research can be found in the literature review of the corrected version, line 189 to 212.
4.b. It is not usual for this journal to include footnotes – please confirm with the editorial office
we tried to delete footnotes
4.c. Paragraph 3.1 – I suggest to include a brief literature review about the latest applications of the input-output framework. Moreover, the presentation of the scientific background has to be improved.
relevant literature review on the use of input-output analysis was included in line 241
4.d. It is not clear how the data included in table 1, were calculated. I suggest to explain it further.
data in table one are directly taken from the input-output table we compiled using morocco’s SUT, we indicated it in the source in the corrected version
4.e. Explain also what is DH.
DH or MAD is the Moroccan currency (Moroccan Dirham), I converted every monetary flow to USD to avoid confusion.
4.f. I suggest to use USD in all cases (instead of $).
replacement done
4.g The resolution (quality) of figure 1, table 6 and figure 2, as well for the tables included in appendices A & B must be improved.
We corrected.
4.h. The similarity index of the manuscript according to the iThenticate report is 14%. I suggest to review the manuscript and ensure the originality of the content.
This most likely stems from the definitions and the official information retrieved from the European commission on the Green Deal, Fit for 55 and the EU’s ETS, and the input-output methodology, we made sure to include the sources … we however made additional efforts to paraphrase in the corrected version of the manuscript
4.i. The reference style used in the manuscript has to be as required by the journal.
We corrected.
Round 2
Reviewer 1 Report
Comments and Suggestions for AuthorsThe paper is much clearer now and methods and data are more appropriate. I recommend the paper for publication as it is.
ps: total in table 8 is not aligned
Author Response
Referee 1 :
The paper is much clearer now and methods and data are more appropriate. I recommend the paper for publication as it is.
ps: total in table 8 is not aligned
We aligned the table 8.
Reviewer 2 Report
Comments and Suggestions for AuthorsI thank the authors for drafting the responses to the review and for completing the manuscript.
Author Response
We have improved the literature review, explanation of calculation and adjusted references.
Reviewer 4 Report
Comments and Suggestions for AuthorsDear Authors,
The manuscript has been improved, however there are some points which still need attention. Please consider the following
1. with reference to our previous comment number 1 (4a ), the mentioned lines (line 189 to 212) still do not contain the relevant literature.
2. with reference to our previous comment number 4 (4d), it is still not clear how the data were calculated. I suggest to explain the calculation method.
3. The reference style used in the manuscript is still not the required by the journal. I suggest to check with the editorial office and the guidelines to authors the appropriate reference style.
Comments on the Quality of English LanguageEnglish language still need attention. I suggest English language and style to be reviewed by an English language native speaker.
Author Response
Dear Authors,
The manuscript has been improved, however there are some points which still need attention. Please consider the following
- with reference to our previous comment number 1 (4a ), the mentioned lines (line 189 to 212) still do not containthe relevant literature.
In our previous response, we did not indicate the appropriate section in which we had improved the literature review of CBAM as this was done in subsections 2.3 and 2.4. This said, we further deepened the section by including additional references (in section 2.3 at lines 140 to 155 and in section 2.4 at lines 199 to 218). See below the references added in the present version and in the previous version.
- with reference to our previous comment number 4 (4d), it is still not clear how the data were calculated. I suggest to explain the calculation method.
The data were obtained in a standard fashion when compiling the input-output matrix for Morocco. Without presenting the entire procedure, we tried to clarify a bit more the method by providing the equations used in the compilation. We referred the interested readers to the 5th chapter of Miller and Blair (2009), which provides an extensive overview of the method and underlying hypotheses.
The brief description of our calculations was added in subsection “3.2. building the Moroccan input-output table”. This description is provided at lines 275 to 279 and at lines 289 to 315.
- The reference style used in the manuscript is still not the required by the journal. I suggest to check with the editorial office and the guidelines to authors the appropriate reference style.
The reference style was modified in the new version.
Here are the new references added in this version (in the revised literature review).
[25] Clora, F., Yu, W., & Corong, E. (2023). Alternative carbon border adjustment mechanisms in the European Union and international responses: Aggregate and within-coalition results. Energy Policy, 174, 113454. https://doi.org/10.1016/j.enpol.2023.113454
[26] Korpar, N., Larch, M., & Stöllinger, R. (2022). The European carbon border adjustment mechanism: a small step in the right direction. International Economics and Economic Policy, 20(1), 95–138. https://doi.org/10.1007/s10368-022-00550-9
[27] Siy, A. L., Wang, A., Zheng, T., & Hu, X. (2023). Research on the impact of the EU’s carbon Border Adjustment Mechanism: Based on the GTAP model. Sustainability, 15(6), 4761. https://doi.org/10.3390/su15064761
[31] Ramadhani, D. P., & Koo, Y. (2022). Comparative analysis of carbon border tax adjustment and domestic carbon tax under general equilibrium model: Focusing on the Indonesian economy. Journal of Cleaner Production, 377, 134288. https://doi.org/10.1016/j.jclepro.2022.134288
[32] Beaufils, T., Ward, H., Jakob, M., & Wenz, L. (2023), Assessing different European Carbon Border Adjustment Mechanisms implementations and their impact on trade partners, Communications Earth & Environment, 4(1), p. 131.
[33] Mortha, A., Arimura, T.H., Takeda, S., Chesnokova, T. (2023). Effect of a European Carbon Border Adjustment Mechanism on the APAC region: A structural gravity analysis, RIETI Discussion Paper Series 23-E-058.
[34] Dobranschi, M., Nerudova, D., Solinova, V., Stadler, K. (2024), Carbon boerder adjustment mechanism challenges and implications: The case of Visegrad countries, Heliyon 10(2024), e30976. https://doi.org/10.1016/j.heliyon.2024.e30976
And in the previous version we added the following references:
[3] Durant, I., Contreras, C., Hamwey, R., Mott, G., Nicita, A., Peters, R., Razo, C., Vivas, D., Chepeliev, M., & Corong, E. (2021). A European Union Carbon Border Adjustment Mechanism: Implications for developing countries (UNCTAD/OSG/INF/2021/2). United Nations Conference on Trade and Development.
[6] Gu, R., Guo, J., Huang, Y., & Wu, X. (2023). Impact of the EU carbon border adjustment mechanism on economic growth and resources supply in the BASIC countries. Resources Policy, 85, 104034. https://doi.org/10.1016/j.resourpol.2023.104034
[7] Sun, X., Mi, Z., Liu, C., Coffman, D., & Liu, Y. (2023). The carbon border adjustment mechanism is inefficient in addressing carbon leakage and results in unfair welfare losses. Fundamental Research (Beijing). https://doi.org/10.1016/j.fmre.2023.02.026
[29] Chepeliev, M. (2021). Possible implications of the European Carbon Border Adjustment Mechanism for Ukraine and other EU trading partners. Energy Research Letters (Asia-Pacific Applied Economics Association. Online), 2(1). https://doi.org/10.46557/001c.21527
[30] Lee, D., & Jeongho, Y. (2022). A study on the economic effects of EU’s CBAM on Korea. Journal of Global Business & Trade, 18(6), 59–78. https://doi.org/10.20294/jgbt.2022.18.6.59
Round 3
Reviewer 4 Report
Comments and Suggestions for AuthorsDear Authors,
Thank you for the consideration of our suggestions. We suggest the manuscript to be accepted for publication after a final editing of the English language and style.
Comments on the Quality of English LanguageWe suggest English language and style to be reviewed once again.
Author Response
As suggested by the editor, we are resubmitting to have our paper edited according to the standard procedure of the journal. This was the only comment left to respond to.
