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A Just Adjustment Mechanism? Investigating the Alignment of the EU’s CBAM with the CBDR-RC Principle

Salvi, Simon Lawrence LU (2025) EKHS22 20251
Department of Economic History
Abstract
Given the existential risk climate change poses to the natural and human world, transnational policies seeking to reduce anthropogenic emissions are beginning to gain prominence, including, notably, the EU’s Carbon Border Adjustment Mechanism (CBAM). This thesis quantitatively investigates whether the distribution of CBAM risk across countries aligns with the principle of Common But Differentiated Capabilities and Respective Capabilities (CBDR-RC), an important consideration in international climate law. It extends the existing normative debate by conducting multivariate cross-sectional and fixed effect regression analysis on a novel time-series CBAM Risk Index (2015-2022) and proxies for the CBDRRC principle. The results indicate mixed... (More)
Given the existential risk climate change poses to the natural and human world, transnational policies seeking to reduce anthropogenic emissions are beginning to gain prominence, including, notably, the EU’s Carbon Border Adjustment Mechanism (CBAM). This thesis quantitatively investigates whether the distribution of CBAM risk across countries aligns with the principle of Common But Differentiated Capabilities and Respective Capabilities (CBDR-RC), an important consideration in international climate law. It extends the existing normative debate by conducting multivariate cross-sectional and fixed effect regression analysis on a novel time-series CBAM Risk Index (2015-2022) and proxies for the CBDRRC principle. The results indicate mixed alignment, which changes depending on income group. While the cross-sectional global trends seemingly align with ‘differentiated responsibilities’, with those more historically responsible for climate change at greater risk from the CBAM, disproportionate risk exists for poorer countries. However, the fixed effect model demonstrated a contrasting view. After controlling for country- and time-fixed effects many of the relationships reverse, with countries less historically responsible for climate change, and least ready to adapt, experiencing greater CBAM risk – misaligning with the principle. Understanding these non-linearities are crucial for ensuring the CBAM aligns with the EU’s international climate obligations. (Less)
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author
Salvi, Simon Lawrence LU
supervisor
organization
course
EKHS22 20251
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Environment and Development, Environment and Trade, Sustainability, Environmental Equity, Government Policy
language
English
id
9199999
date added to LUP
2025-06-17 14:27:33
date last changed
2025-06-17 14:27:43
@misc{9199999,
  abstract     = {{Given the existential risk climate change poses to the natural and human world, transnational policies seeking to reduce anthropogenic emissions are beginning to gain prominence, including, notably, the EU’s Carbon Border Adjustment Mechanism (CBAM). This thesis quantitatively investigates whether the distribution of CBAM risk across countries aligns with the principle of Common But Differentiated Capabilities and Respective Capabilities (CBDR-RC), an important consideration in international climate law. It extends the existing normative debate by conducting multivariate cross-sectional and fixed effect regression analysis on a novel time-series CBAM Risk Index (2015-2022) and proxies for the CBDRRC principle. The results indicate mixed alignment, which changes depending on income group. While the cross-sectional global trends seemingly align with ‘differentiated responsibilities’, with those more historically responsible for climate change at greater risk from the CBAM, disproportionate risk exists for poorer countries. However, the fixed effect model demonstrated a contrasting view. After controlling for country- and time-fixed effects many of the relationships reverse, with countries less historically responsible for climate change, and least ready to adapt, experiencing greater CBAM risk – misaligning with the principle. Understanding these non-linearities are crucial for ensuring the CBAM aligns with the EU’s international climate obligations.}},
  author       = {{Salvi, Simon Lawrence}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{A Just Adjustment Mechanism? Investigating the Alignment of the EU’s CBAM with the CBDR-RC Principle}},
  year         = {{2025}},
}