Design matters: some options (e.g. substituting international credits for domestic pricing) risk weakening incentives and CBAM’s diffusion effects.
Report: climate-club.org/wp-content/u...
#CBAM #CarbonPricing #ClimatePolicy #ClimateTrade
In a recent contribution to the Climate Club’s flagship report, Carolyn Fischer and I examine the core design choices:
– what qualifies as a carbon price
– treatment of rebates, exemptions & free allocation
– indirect price signals
– crediting across heterogeneous systems
More broadly, recognition of foreign carbon pricing has been a major driver of the global diffusion of carbon pricing — but its design is far from straightforward.
A key implementing regulation on this issue is still pending. That regulation (expected soon) will determine CBAM obligations for imports from countries with carbon pricing in place (e.g. China, Korea) or under development (Brazil, India, Türkiye).
Counting on carbon pricing under the CBAM: harder than it sounds.
As the EU’s Carbon Border Adjustment Mechanism enters its definitive phase, one missing piece will decisively shape both compliance costs and policy incentives: how to account for a carbon price effectively paid in third countries.
New CEEPR working paper on how to address import dependence for clean energy technologies and critical raw materials with @mkalkuhl.bsky.social , Robert Marschinski, @mehling.bsky.social, @joschkawanner.bsky.social kawanner.bsky.social.
🌍 New in @nature.com: The geoeconomic turn in decarbonization, with data from Simon Evenett et al. and @industrialpolicy.bsky.social @ucberkeleyofficial.bsky.social @natureatcal.bsky.social www.nature.com/articles/s41... 🧵
