CBAM for the EU : A policy proposal
April 22, 2021
Andrei Marcu, et al.
1. Introduction
An important element of the comprehensive suite of climate and environmental policies advanced under the “European Green Deal” (EGD) is the “Carbon Border Adjustment Mechanism” (CBAM). CBAM is a policy safeguard against emissions leakage, that is, the relocation of emitting activities from the European Union (EU) to third countries due to the impact of EU climate policy ambition on production and investment decisions. A legislative proposal setting out the parameters of the CBAM is expected from the European Commission by the end of June 2021 as part of the “Fit for 55” package of initiatives operationalizing the strengthened climate target under the EGD. ERCST has accompanied the policy discussion on the CBAM with a number of activities, including research and analysis as well as extensive engagement of relevant stakeholders within and beyond the EU. Based on these activities, it has released two major reports: first, a detailed analysis of the central design choices faced when elaborating a CBAM, including alternative policy options and instrument combinations (“Border Carbon Adjustments in the EU: Issues and Options”);1 and, second, a detailed sectoral assessment assessing sectoral particularities, such as market structure, trade flows, and decarbonization pathways, and their implications for the design and implementation of a CBAM (“Border Carbon Adjustments in the EU: Sectoral Deep Dive”).
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