Comparing the European Union Carbon Border Adjustment Mechanism, the Clean Competition Act, and the Foreign Pollution Fee Act

In a two recent publications, Carbon Border Adjustments: Design Elements, Options, and Policy Decisions and Foreign Pollution Fee Act: Design Elements, Options, and Policy Decisions, we provided an overview and comparison of current border adjustment mechanisms (BAMs). In the first publication we focused on the European Union’s Carbon Border Adjustment Mechanism (EU CBAM); the Fair, Affordable, Innovative, and Resilient Transition and Competition Act (FAIR Act), sponsored by Senator Chris Coons (D-DE); and the Clean Competition Act (CCA), by Senator Sheldon Whitehouse (D-RI). In the second publication we reviewed a new piece of proposed US Senate legislation, the Foreign Pollution Fee Act (FPFA), introduced by Senator Bill Cassidy (R-LA), Senator Lindsey Graham (R-SC), and Senator Roger Wicker (R-MS). In this report we provide more detail on the EU CBAM and compare it to the FPFA and the CCA, which was reintroduced on December 6, 2023. A great deal of the FPFA description used in this report is reproduced from our publication Foreign Pollution Fee Act: Design Elements, Options, and Policy Decisions. This report uses the design elements introduced in the previous publications to describe the policies reflected in each BAM. We have made every effort to be concise with respect to our descriptions of the design elements, but that has required us to abstract from a great deal of detail in each BAM. We hope this report will provide a roadmap that informs understanding of these mechanisms, but it should not be interpreted as a complete and comprehensive description and review.