The Achilles heel of border carbon adjustments: Unintended effects on developing countries

Abstract

Several recent proposals to reduce the risk of carbon leakage have caused a lot of stress, not only to third states’ governments, but also to corporations operating in many developing countries. This chapter studies how the European Union Carbon Border Adjustment Mechanism (CBAM) and similar initiatives in Canada, the UK and the US may have an unexpected impact on the sustainable development goals included in the global 2030 agenda. In the midst of the current uncertainty, cooperative efforts and climate fairness are key to the successful implementation of new carbon emission controls in line with the Paris Agreement. It is critical to help developing countries in reducing their emissions, with technological, trade, administrative and financial support for a just transition.