Pitfalls of the EU’s Carbon Border Adjustment Mechanism

The European Union (EU), which has led international discussions on global warming, officially announced its plan for the Carbon Border Adjustment Mechanism (CBAM) in July 2021. Many existing studies have indicated the CBAM will curtail greenhouse gases, and will subsequently be positive in terms of...

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Autores principales:	Byeongho Lim, Kyoungseo Hong, Jooyoung Yoon, Jeong-In Chang, Inkyo Cheong
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	carbon border adjustment mechanism (CBAM) general agreement on tariffs and trade (GATT) carbon border tax carbon emissions carbon pricingfi Technology T
Acceso en línea:	https://doaj.org/article/1a3682d698dd4aa89d6fda6bde23331b
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spelling	oai:doaj.org-article:1a3682d698dd4aa89d6fda6bde23331b2021-11-11T16:02:39ZPitfalls of the EU’s Carbon Border Adjustment Mechanism10.3390/en142173031996-1073https://doaj.org/article/1a3682d698dd4aa89d6fda6bde23331b2021-11-01T00:00:00Zhttps://www.mdpi.com/1996-1073/14/21/7303https://doaj.org/toc/1996-1073The European Union (EU), which has led international discussions on global warming, officially announced its plan for the Carbon Border Adjustment Mechanism (CBAM) in July 2021. Many existing studies have indicated the CBAM will curtail greenhouse gases, and will subsequently be positive in terms of reducing global warming. However, serious legal issues and trade disputes are expected in terms of the compatibility of the CBAM with the trade rules of the General Agreement on Tariffs and Trade (GATT). Contrary to the EU’s explanation, the international community has a strong view of CBAM as a new trade barrier under the guise of preventing global warming. Above all, this is because it is an arbitrary measure by the EU and not the one that has been internationally agreed upon. Therefore, this paper tries to identify the pitfalls and estimate the global cost of CBAM, arguing that the mechanism is not in line with international trade rules, and that many countries will not sit back and suffer from it. The world economy will inevitably face a vicious cycle of trade retaliation. The CBAM will drive up trade costs and cause another trade distortion. While the goal of preventing climate change is good, the CBAM scheme is too costly for the world economy.Byeongho LimKyoungseo HongJooyoung YoonJeong-In ChangInkyo CheongMDPI AGarticlecarbon border adjustment mechanism (CBAM)general agreement on tariffs and trade (GATT)carbon border taxcarbon emissionscarbon pricingfiTechnologyTENEnergies, Vol 14, Iss 7303, p 7303 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	carbon border adjustment mechanism (CBAM) general agreement on tariffs and trade (GATT) carbon border tax carbon emissions carbon pricingfi Technology T
spellingShingle	carbon border adjustment mechanism (CBAM) general agreement on tariffs and trade (GATT) carbon border tax carbon emissions carbon pricingfi Technology T Byeongho Lim Kyoungseo Hong Jooyoung Yoon Jeong-In Chang Inkyo Cheong Pitfalls of the EU’s Carbon Border Adjustment Mechanism
description	The European Union (EU), which has led international discussions on global warming, officially announced its plan for the Carbon Border Adjustment Mechanism (CBAM) in July 2021. Many existing studies have indicated the CBAM will curtail greenhouse gases, and will subsequently be positive in terms of reducing global warming. However, serious legal issues and trade disputes are expected in terms of the compatibility of the CBAM with the trade rules of the General Agreement on Tariffs and Trade (GATT). Contrary to the EU’s explanation, the international community has a strong view of CBAM as a new trade barrier under the guise of preventing global warming. Above all, this is because it is an arbitrary measure by the EU and not the one that has been internationally agreed upon. Therefore, this paper tries to identify the pitfalls and estimate the global cost of CBAM, arguing that the mechanism is not in line with international trade rules, and that many countries will not sit back and suffer from it. The world economy will inevitably face a vicious cycle of trade retaliation. The CBAM will drive up trade costs and cause another trade distortion. While the goal of preventing climate change is good, the CBAM scheme is too costly for the world economy.
format	article
author	Byeongho Lim Kyoungseo Hong Jooyoung Yoon Jeong-In Chang Inkyo Cheong
author_facet	Byeongho Lim Kyoungseo Hong Jooyoung Yoon Jeong-In Chang Inkyo Cheong
author_sort	Byeongho Lim
title	Pitfalls of the EU’s Carbon Border Adjustment Mechanism
title_short	Pitfalls of the EU’s Carbon Border Adjustment Mechanism
title_full	Pitfalls of the EU’s Carbon Border Adjustment Mechanism
title_fullStr	Pitfalls of the EU’s Carbon Border Adjustment Mechanism
title_full_unstemmed	Pitfalls of the EU’s Carbon Border Adjustment Mechanism
title_sort	pitfalls of the eu’s carbon border adjustment mechanism
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/1a3682d698dd4aa89d6fda6bde23331b
work_keys_str_mv	AT byeongholim pitfallsoftheeuscarbonborderadjustmentmechanism AT kyoungseohong pitfallsoftheeuscarbonborderadjustmentmechanism AT jooyoungyoon pitfallsoftheeuscarbonborderadjustmentmechanism AT jeonginchang pitfallsoftheeuscarbonborderadjustmentmechanism AT inkyocheong pitfallsoftheeuscarbonborderadjustmentmechanism
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Pitfalls of the EU’s Carbon Border Adjustment Mechanism

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