UNICON

The European Union’s Carbon Border Adjustment Mechanism (CBAM) underscores the need for accurate carbon emissions assessment, particularly for Korea’s steel sector, which faces high exposure due to its emissions intensity. This study compares emissions estimates from two widely used multi-regional input-output databases–GTAP and OECD ICIO–revealing significant discrepancies across scopes 1, 2, and 3 emissions. Methodological differences, particularly in the treatment of self-generated electricity and fossil fuel use, result in substantial variations, with GTAP estimating scope 1 emissions to be 70% lower than ICIO, while scope 2 emissions also show a notable 44% difference. These discrepancies impact CBAM cost estimations, industrial decision-making, and macroeconomic assessments, raising concerns about potential distortions in carbon pricing policies. Addressing these inconsistencies requires harmonized carbon accounting frameworks to ensure fairer CBAM implementation and more accurate policy assessments. Standardized emissions reporting, improved data accuracy, and international collaboration are critical to minimizing economic distortions and supporting the transition toward low-carbon industrial strategies. © 2025 Korea International Economic Association.