EU MONITOR: The Carbon Border Adjustment Mechanism (CBAM) and its effects on trade with third countries

Trade with third countries is the major component of the EU’s foreign policy, serving as a critical economic, diplomatic and geopolitical tool. As such, the EU is eager to green this area of its activity via a host of policies, one such being the Carbon Border Adjustment Mechanism (CBAM). Serving essentially as a form of carbon tax on goods imported into the  EU, the CBAM aims to instigate more climate friendly production of goods in third countries. In simple terms, the CBAM would, as an incentive for global action against climate change, tax goods imported from countries with less ambitious climate policies.

The whole article is available under the PDF button.