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In light of the EU’s more ambitious climate targets, the European Commission intends to introduce a carbon border adjustment mechanism in order to stem carbon leakage.
Three possible configurations are under discussion: a kind of consumption tax, a tariff on the carbon content of imported goods, and the inclusion of imports in the EU-wide emissions trading system.
There is no ideal carbon border adjustment mechanism. Key problems are WTO conformity, the calculation of the "carbon content", and compatibility with existing climate protection measures.
In this context, climate diplomacy does not lose significance. In contrast, it has to be hoped that an EU border adjustment mechanism is ultimately made redundant by a climate protection regime covering all important trading regions.
Read our facts & findings here as a PDF.
Three possible configurations are under discussion: a kind of consumption tax, a tariff on the carbon content of imported goods, and the inclusion of imports in the EU-wide emissions trading system.
There is no ideal carbon border adjustment mechanism. Key problems are WTO conformity, the calculation of the "carbon content", and compatibility with existing climate protection measures.
In this context, climate diplomacy does not lose significance. In contrast, it has to be hoped that an EU border adjustment mechanism is ultimately made redundant by a climate protection regime covering all important trading regions.
Read our facts & findings here as a PDF.
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