What design of the carbon border adjustment mechanism (CBAM) ensures an inclusive transition to climate neutrality?

The Climate Friendly Materials Platform argues that the EU's proposed CBAM design needs refinements to create an effective investment framework for the green transition. They propose a combined package consisting of a climate contribution on basic material production and imports, free allowance allocations for firms with climate neutrality transition plans, and EU-scale carbon contracts for difference to cover incremental investment costs. The researchers contend that while free allowances are controversial, they can achieve both environmental and industrial policy objectives when integrated with the other two elements. They suggest the CBAM's transition period and use of default values provide a mechanism to incorporate these refinements until an international agreement on carbon pricing is reached.

• The Climate Friendly Materials Platform proposes a three-part policy package to secure investment incentives for climate neutrality while mitigating carbon leakage and WTO compatibility risks: a climate contribution on basic material production and imports, free allowance allocations for firms with transition plans, and EU-scale carbon contracts for difference for incremental investment costs.
• The researchers argue that free allowance allocations, which are typically controversial and could undermine policy objectives on their own, can successfully meet both industrial and environmental goals if combined with a climate contribution and carbon contracts for difference.

APA

Climate Strategies (2021). What design of the carbon border adjustment mechanism (CBAM) ensures an inclusive transition to climate neutrality? https://climatestrategies.org/publication/closing-the-green-deal-for-industry/

Chicago

Climate Strategies. What design of the carbon border adjustment mechanism (CBAM) ensures an inclusive transition to climate neutrality? 2021. https://climatestrategies.org/publication/closing-the-green-deal-for-industry/.

Wikipedia

{{cite press release |author=Climate Strategies |title=What design of the carbon border adjustment mechanism (CBAM) ensures an inclusive transition to climate neutrality? |date=15 June 2021 |url=https://climatestrategies.org/publication/closing-the-green-deal-for-industry/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{climatestrategies2021what, author = {{Climate Strategies}}, title = {{What design of the carbon border adjustment mechanism (CBAM) ensures an inclusive transition to climate neutrality?}}, publisher = {Climate Strategies}, year = {2021}, month = jun, url = {https://climatestrategies.org/publication/closing-the-green-deal-for-industry/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }