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The EU Proposal for a Carbon Border Adjustment Mechanism (CBAM): An Analysis under WTO and Climate Change Law

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  • Espa, Ilaria
  • Francois, Joseph

Abstract

This paper scrutinizes the European Union’s proposal for a carbon border adjustment mechanism (CBAM) under the rules of the World Trade Organization (WTO) and climate change law. It first examines the logic behind the CBAM as a border carbon adjustment measure, having due regard to the complex interplay between its stated carbon leakage rationale and its fair competition mechanics. It then dissects the main anticipated features of the CBAM and discusses how they may fare under both WTO law and climate change law. Finally, it identifies the most critical proposed design elements from a legal perspective and discusses possible alternatives or variations that could better align the CBAM with its climate change purpose. Read the full Working Paper by clicking on the link below.

Suggested Citation

  • Espa, Ilaria & Francois, Joseph, 2022. "The EU Proposal for a Carbon Border Adjustment Mechanism (CBAM): An Analysis under WTO and Climate Change Law," Papers 1375, World Trade Institute.
    • Handle: RePEc:wti:papers:1375
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    File URL: http://www.wti.org/media/filer_public/ee/61/ee6171fd-a68d-4829-875e-d9b0c32298b5/wti_working_paper_06_2022.pdf
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    Cited by:

    1. Sheldon, Ian M. & McCorriston, Steve, 2023. "Vertical Markets, Carbon Border Tax Adjustments and ‘Dirty Inputs’," 2023 Annual Meeting, July 23-25, Washington D.C. 335697, Agricultural and Applied Economics Association.

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