Understanding the EU's Carbon Border Adjustment Mechanism (CBAM)
Published 2024-07-17
The European Union’s introduction of the Carbon Border Adjustment Mechanism (CBAM) marks a bold new experiment in global trade and climate policy. By taxing imports like iron, steel, cement, and aluminium based on their greenhouse gas (GHG) emission intensities, the EU aims to level the playing field for its firms operating under the Emissions Trading System (ETS). However, this mechanism raises several critical concerns about its broader implications and fairness.
The impact of CBAM is likely to be disproportionately felt by developing countries, potentially hindering their economic growth in key sectors and access to global markets. At the 28th Conference of Parties in 2023, developing countries had raised concerns about the negative impacts of unilateral trade measures like CBAM on their economies.
A new report by CSE – the first in a research series titled ‘Trade and Climate: The Global South’s response to a changing trade regime in the era of climate change’ -- explores answers to this question. Join experts from CSE and other parts of the world for an online release of the report and discussions on it
All Comments (3)
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Thank you for the detailed study and report
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31:00 I don't think you realize but your argument is actually helps the case for a CBAM. The EU has two types of emissions 1, domestic production and 2, imported production. You say the EU should reduce its emissions taking into account both, because currently the EU only reduces its domestic emissions. This can only happen in two ways: 1, the EU is onshoring more production, so its domestic ETS covers more goods. But you think its unfair because its shift production back to the EU and developing nations will miss out on export revenue. 2, the EU expand its ETS to imported goods (CBAM). But you think its also unfair because developing nations will miss out on export revenue. Sorry but either the EU is doing enough emission reduction and we let the developing nations pollute more OR the EU is not doing enough and we have to onshore production or have a CBAM. You cant have it both ways.
