Carbon tariff explained

A carbon tariff or carbon border adjustment mechanism (CBAM) is an eco-tariff on embedded carbon.[1] In 2024 the United States said it is not a carbon tax,[2] but the World Trade Organization is dysfunctional so is unable to agree or disagree.[3] One aim to prevent carbon leakage from nations without a carbon price. Examples of imports which are high-carbon and so may be subject to a carbon tariff are electricity generated by coal-fired power stations, iron and steel from blast furnaces, and fertilizer from the Haber process. Several countries levy carbon tariffs or are considering them.[4]

Existing and forthcoming

California

California has a carbon border adjustment mechanism for imported electricity.[5]

Notes and References

  1. Web site: What is a Carbon Border Adjustment Mechanism? . 2024-11-13 . Brookings . en-US.
  2. Web site: What is a carbon border adjustment mechanism (CBAM) and what are some legislative proposals to make one? . 2024-11-13 . . en.
  3. Web site: Porterfield . Matthew C. . Carbon Import Fees and the WTO .
  4. Web site: EU's CBAM to spur other countries to introduce carbon border levies: IETA .
  5. Web site: California ETS Border Carbon Adjustment . Model Laws for Deep Decarbonization in the United States . 21 May 2023.

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