The European Union Carbon Border Adjustment Mechanism as a Green Tax Policy Instrument
Susana Cristina Rodrigues Aldeia
Portucalense University, REMIT-Research on Economics, Management and Information Technologies IJP-Portucalense Legal Institute, Instituto Politécnico da MaiaPorto,
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27 mar 2025
O artykule
Data publikacji: 27 mar 2025
Zakres stron: 85 - 101
DOI: https://doi.org/10.2478/ceej-2025-0006
Słowa kluczowe
© 2025 Susana Cristina Rodrigues Aldeia, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
Economic literature concerning CBAM
| Investigates the impact of carbon tariffs on China’s agricultural trade. | The research concludes that (1) carbon tariffs can suppress international demand for agricultural products and increase prices on the international market; and (2) CBAM reduces the negative impact of carbon tariffs through trade facilitation and decreases the effectiveness of reducing carbon emissions due to the substantial commercial demand, while also encouraging countries to develop ecologically sound and low-carbon agriculture. | |
| Reviews the various economic and environmental repercussions of various design options. | The research reveals that CBAM is a successful measure in curbing carbon leakage. However, its implementation will lead to a rise in carbon prices within the European Emissions Trading Scheme. It is anticipated that downstream industries not encompassed by the CBAM and European exporters of high-emitting industries will experience a decline in competitiveness in export markets, despite the availability of rebates. | |
| Assesses how alternative designs of the E.U.’s CBAM, within various international reactions, affect global and regional GHG emissions, outputs and trade flows. | The findings highlight the significant carbon leakages and output reductions experienced by the E.U.’s emissions-intensive trade-exposed (EITE) sectors when implementing the Green Deal. | |
| Evaluates the potential impact of CBAM policy on the Russian economy. | Findings indicate that implementing CBAM could lead to higher import costs for ACEFIS industries in Russia. This could result in increased expenses for exporters, and thus lost market share and importers, due to the shift in demand for ACEFIS products or a search for more favourable suppliers in other regions. | |
| Quantifies the distributional impacts of jointly implementing CBAM within a climate alliance or club consisting of the E.U., the U.S., and China. | Acknowledges that while the E.U. has committed to introducing CBAM as part of its green climate agreement, further climate efforts to limit global warming require collective implementation involving the main emitters – China and the U.S. The authors argue that a coalition would reduce leakage, improve production in energy-intensive industries, and increase the clubs’ welfare compared to scenarios with non-CBAM and unilateral implementation. | |
| Analyses CBAM’s impact on domestic and foreign interest groups. | The evidence presented makes a case that CBAM should be utilised to aid national mitigation efforts within an open climate alliance, rather than extending E.U. climate policy to other nations. Moreover, the gradual implementation of CBAM can help alleviate political pushback from domestic and foreign industries. | |
| The authors explore (1) how CBAM can limit renewable energy penetration by raising the cost of imported power or discouraging imports and (2) the implications of network pricing and investments in interconnection capacity. | The study’s findings suggest that a higher price on carbon can lead to increased interconnection investment, which in turn would diminish the efficacy of carbon pricing. The author concludes that to bolster renewable energy generation beyond domestic consumption, the CBAM should be accompanied by a subsidy for renewables. | |
| Analyses the potential impacts of CBAM on Brazil’s economy, considering different scenarios for the implementation of CBAM as a climate policy by the E.U. and Brazil. | Brazilian industries may not face significant losses or competitiveness issues. | |
| Identifies non-E.U. countries that have a stake in the success of the CBAM, comparing three different perspectives to create a comprehensive list of countries. | Understanding these perspectives can help the E.U. ensure the CBAM’s success. | |
| Proposes a system for regulating carbon emissions for countries that export products to the E.U. | This work makes a significant contribution to stimulating the reduction of CO2 emissions by producers with the proposed tax mechanism, as well as preventing the leakage of greenhouse gases on the territory of third countries according to the CBAM policy. | |
| This article seeks to add nuance to the allegations of discrimination against countries that do not follow the E.U.’s climate model and therefore violate international trade and climate law. | It concludes that calculating actual emissions (rather than default values) under the E.U.’s CBAM allows exporters to reflect compliance with foreign emission standards, thus respecting the right of states to pursue reduced emissions through traditional regulation. | |
| This study carries out a literature review of the most recent economic studies on CBAM and presents an exhaustive synthesis of this literature. | The text discusses the potential impacts of CBAM on three key policy objectives: fair competition, carbon leakage reduction, and minimizing overall welfare costs. It highlights the influence of policy design and economic characteristics on the effectiveness of CBAM and compares alternative policy designs concerning these objectives. |