PolicyPaper CBAM - The Carbon Border Adjustment Mechanism (CBAM) and Its Border Effects: How Can Europe Become a

Globally, the biggest exporters of the EU and with regards to our main trading partners”.7 to the EU of products that will be affected by the CBAM But the findings do not reveal an in-depth analysis of the are Russia, China and the United Kingdom. [...] And in the second sce- job losses, and that Armenia, Georgia and Turkey are among nario, the CBAM is applied to all goods imported to the EU the countries with significant levels of exposure in terms of in keeping with the EU’s plans to expand the CBAM to more wages.15 These results are in line with the aforementioned sectors in the long term.13 The study found that the EU UNCTAD study, which iden. [...] This is necessary to address their global trade with the purpose of concentrating the the negative economic impact that the mechanism will less carbon-intensive exports in a CBAM-covered sector have on the welfare of the rest of the world. [...] should the cost of carbon (per unit of carbon) in Morocco, Algeria and Ukraine be equal to the cost in the EU? After all, Mi琀椀ga琀椀ng e昀昀ort: carbon costs per unit of output will be vastly higher in these One of the EU’s policy priorities should be to expand the countries than in the EU. [...] Given the significant size of its economy and high degree However, the CBAM and other recent and current EU policy of economic interconnectedness, the EU should have the efforts are likely to come at a cost to other countries capability to play the role of a true geoeconomic actor at and threaten to push countries in the EU’s neighbourhood the very least in its immediate vicinity of neighbouring a.