Research
Carbon border adjustments like the EU's CBAM occupy genuinely contested ground: empirical evidence suggests they modestly reduce carbon leakage and can reinforce domestic carbon pricing, but modeling consistently shows their direct emissions reductions are small, and their distributional costs fall disproportionately on developing economies whose per-capita historical emissions are a fraction of Europe's. The core tension is not environmental versus economic but architectural — who controls the carbon accounting standards, who captures the revenue, and whether the mechanism functions as a complement to climate finance and technology transfer or as a substitute for it. The most consequential emerging story is not the EU-US policy divergence but the Global South's active construction of counter-architectures — China's carbon labeling, India's WTO coalitions, Argentina's lithium sovereignty law — which signal that the fight over carbon tariffs is ultimately a fight over who governs the rules of the decarbonizing global economy.
This post explains CBAMs (fees levied on imported goods based on the greenhouse gases emitted during their production) and the debate over implementation.
CBAM will apply in its definitive regime from 2026, with a transitional phase of 2023 to 2025. This gradual introduction is aligned with the phase-out of free ...
The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines.
A carbon border adjustment mechanism can theoretically help reduce carbon emissions, but the policy faces serious practical and legal challenges ...
This paper evaluates recent recommendations to use trade policy to solve the free-rider problem associated with climate mitigation strategies.
Scientists, economists, businesses, and almost 3/4ths of the American people support charging fossil fuel companies when they pollute.
Therefore, protectionist measures, exemplified by reciprocal tariffs, erode the South's right to sustainable development by increasing the costs ...
The most consequential developments for U.S. emissions in 2026 are likely to emerge from decisions on trade dynamics and emissions data ...
The EU's Carbon Border Adjustment Mechanism (CBAM) is the EU's tool to put a fair price on the carbon emitted during the production of carbon intensive goods.
We consider the opportunities and risks from introducing carbon taxes in developing countries, with reference to Ethiopia and Ghana as case studies.
The vast literature on this phenomenon has termed it carbon offshoring or carbon leakage. This issue warrants greater attention.
Beginning in January 2026, the EU will start imposing tariffs on imports from countries that do not price carbon at the bloc's market rate, ...
Avoiding double counting is a key marker of quality in carbon offset projects – ensuring that carbon credits are never claimed by more than one entity.
This blog post explores the likely impact of the European Union's Carbon Border Adjustment Mechanism (CBAM) on global carbon emissions and trade.
Tariffs are unlikely to increase manufacturing employment as an empirical matter. But more fundamentally, invoking manufacturing employment ...
This article provides an assessment of the legality of the CBAM under international law, namely pursuant to international trade law, especially ...
Tariff Increase: China raised its retaliatory tariff rate on U.S.-origin goods from 34 percent to 84 percent, effective April 10, 2025, at 12:01 ...
In capital-intensive sectors like the power sector, both investors and policymakers need long-term plans for decarbonization based on clear and credible.
Carbon pricing policies provide a direct financial incentive to reduce emissions, and they can be implemented through a tax or fee (e.g., in ...
In Section 4.2, the paper presents a case study on the ways in which carbon tariffs imposed by the EU will distort exports from South Africa and ...
A CBAM could account for differences in the higher carbon goods from countries with higher emissions per ton of product and reward the most efficient producers.
In a post-colonial analysis of historical emissions, Carbon Brief assigns all emissions during periods of colonial rule to the colonising ...
Analysis: Which countries are historically responsible for climate change ... emissions from land use and forestry, in addition to those from ...
This report examines how the European Union carbon border adjustment mechanism creates an important incentive for other countries to adopt carbon pricing.
The CBAM aims to create a level-playing field by charging an additional fee on carbon intensive goods entering the European single market.
We show that the introduction of carbon tariffs can do more harm than good to domestic EITE industries. Two determinants drive the sign and magnitude of EITE ...
The model projects that CCA will raise $10.6 billion (in 2025 USD) in U.S. government revenue on an annual basis, $7.1 billion from the domestic ...
Because of the poor design of the tariffs and the fact that they are somewhat arbitrary, some countries may just shift production to a low ...
We examine positive and normative questions surrounding the use of carbon taxes and green subsidies in open economies.
The CBAM allows the EU to leverage its market power to promote global decarbonisation. While the policy has a strong potential to mitigate ...
As an alternative to multilateral treaty processes and a tool to reduce the political cost of climate action, carbon tariffs seem promising.
If the tax only applied to consumption of energy goods, then the burden on low-income households would climb to nearly four times that of their higher-income ...
Under a carbon tax, the government sets a price that emitters must pay for each ton of greenhouse gas emissions they emit.
President Trump promised in November to “sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the ...
Tariffs can help attract investment, diversify supply chains and build local value – but they also risk slowing clean-tech deployment, raising ...
Carbon tariffs can cause political tension between trading partners. Some nations view them as fair steps toward lowering global emissions, ...
A recent World Bank study finds that such reductions can significantly increase the diffusion of clean technologies in developing countries.
The carbon tariff impositions of developed countries on China will decrease the export to EU, the USA, and Japan but increase the export of China to other ...
Border Carbon Adjustments (BCAs) would help mitigate carbon leakage by applying a tariff to goods imported from countries that do not have a comparable carbon ...
The net effect is that global emissions would be relatively unchanged. Reduce output in downstream industries. Industries such as construction ...
Consumption-based emissions are national emissions that have been adjusted for trade. They are territorial emissions minus emissions embedded in exports, ...
With unilateral emission constraints, marginal abatement cost in countries without emission control are zero, indicating a huge but unexploited potential for ...
In 2022, developed countries met this goal for the first time, providing a total of $115.9 billion in climate finance for developing countries. However, only a ...
Plan for future costs: begin forecasting the potential financial impact of purchasing CBAM certificates from 2026 onwards and factor this into ...
The basic idea behind a carbon tariff, more formally known as a Border Carbon Adjustment (BCA), is to levy a tariff or fee on foreign imports.
In their NDCs, countries communicate actions they will take to reduce their greenhouse gas emissions in order to reach the goals of the Paris Agreement.
Green industrial policies can also have significant implications for trade and market access. Carbon costs applicable to imports to the EU under ...
Definitive resolution of the status of carbon import fees is unlikely anytime soon. The ongoing impasse over the appointment of new members of the WTO's.
(1) Absent a domestic price on carbon, a carbon tariff imposes the same costs on domestic consumers as a domestic carbon price, but a carbon tariff also ...
Key Messages in 2025 · Carbon pricing now covers around 28% of global emissions. · Carbon pricing mobilized over $100 billion for public budgets in 2024. · Over ...
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