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The Impact of the European Union Carbon Border Adjustment Mechanism: A Development Perspective

Seuren, Anouk LU (2024) EKHS34 20221
Department of Economic History
Abstract (Swedish)
The introduction of the “Carbon Border Adjustment Mechanism” (CBAM) as part of the European Union Fit for 55 and Green Deal package, has evoked much political and academic debates. So far, these have mostly focused on its effectiveness in leveling the playing field for European industries and reducing the risk of carbon leakage. We contribute to this debate by analyzing the potential effects of a CBAM for developing countries, using a risk assessment framework with global trade and multi-region input-output matrices. This provides a comprehensive overview of the general relative risk and country-specific impacts by drawing on the concepts of exposure and vulnerability to the EU CBAM. The results confirm that such a measure will impose... (More)
The introduction of the “Carbon Border Adjustment Mechanism” (CBAM) as part of the European Union Fit for 55 and Green Deal package, has evoked much political and academic debates. So far, these have mostly focused on its effectiveness in leveling the playing field for European industries and reducing the risk of carbon leakage. We contribute to this debate by analyzing the potential effects of a CBAM for developing countries, using a risk assessment framework with global trade and multi-region input-output matrices. This provides a comprehensive overview of the general relative risk and country-specific impacts by drawing on the concepts of exposure and vulnerability to the EU CBAM. The results confirm that such a measure will impose significant risks on developing countries, which are unequally distributed around the globe. Three comparative case studies on Egypt, Mozambique, and Zimbabwe demonstrate challenges resulting from higher carbon-intensive production processes and trade reliance, which leads to export losses in the case of a CBAM introduction. These countries’ risk patterns should be considered for the upcoming revision period to ensure an effective and WTO-compatible implementation. (Less)
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author
Seuren, Anouk LU
supervisor
organization
course
EKHS34 20221
year
type
H2 - Master's Degree (Two Years)
subject
keywords
CBAM, European Union, Green Deal, Climate Policy, Carbon Abatement and Border Tariffs, International Trade, Developing Countries, MRIO models
language
English
id
9146718
date added to LUP
2024-01-25 08:43:10
date last changed
2024-01-25 08:43:10
@misc{9146718,
  abstract     = {{The introduction of the “Carbon Border Adjustment Mechanism” (CBAM) as part of the European Union Fit for 55 and Green Deal package, has evoked much political and academic debates. So far, these have mostly focused on its effectiveness in leveling the playing field for European industries and reducing the risk of carbon leakage. We contribute to this debate by analyzing the potential effects of a CBAM for developing countries, using a risk assessment framework with global trade and multi-region input-output matrices. This provides a comprehensive overview of the general relative risk and country-specific impacts by drawing on the concepts of exposure and vulnerability to the EU CBAM. The results confirm that such a measure will impose significant risks on developing countries, which are unequally distributed around the globe. Three comparative case studies on Egypt, Mozambique, and Zimbabwe demonstrate challenges resulting from higher carbon-intensive production processes and trade reliance, which leads to export losses in the case of a CBAM introduction. These countries’ risk patterns should be considered for the upcoming revision period to ensure an effective and WTO-compatible implementation.}},
  author       = {{Seuren, Anouk}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Impact of the European Union Carbon Border Adjustment Mechanism: A Development Perspective}},
  year         = {{2024}},
}