What should a carbon border measure look like?

The document outlines requirements for the EU's proposed carbon border adjustment measure, asserting that it must replace all existing industry protections, such as free pollution permits, to avoid being mere protectionism. It proposes that foreign producers buy pollution permits under the EU carbon market to strengthen carbon prices and incentivise innovation. The author suggests targeting the most polluting sectors—specifically steel, cement, and bulk chemicals—while exempting Least Developed Countries (LDCs) and Small Island Developing States (SIDS). Finally, it argues that all revenues generated should fund climate action, either through EU innovation funds or as climate finance for developing nations.

• For a carbon border adjustment measure to function as a climate tool rather than protectionism, it must replace all current EU industry protections, including free pollution permits and indirect cost compensation for electricity.
• The most realistic implementation method is requiring foreign producers or importers to purchase pollution permits under the EU carbon market, which would increase demand for allowances and strengthen the carbon price.
• The measure should initially target the most polluting sectors—steel, cement, and bulk chemicals—which together represent nearly 60% of industrial emissions within the EU carbon market.
• To account for the disproportionate impact of carbon prices on low-income nations, the measure should exempt Small Island Developing States (SIDS), Least Developed Countries (LDCs), and countries with similar climate policies.
• All revenues from the carbon border measure should be dedicated to climate action, split between contributions to developing countries as climate finance and EU funds like the Innovation Fund and Modernisation Fund.

APA

Amaral, K. (2020). What should a carbon border measure look like? Carbon Market Watch. https://carbonmarketwatch.org/2020/11/25/what-should-a-carbon-border-measure-look-like/

Chicago

Amaral, Kaisa. What should a carbon border measure look like? Carbon Market Watch, 2020. https://carbonmarketwatch.org/2020/11/25/what-should-a-carbon-border-measure-look-like/.

Wikipedia

{{cite report |last1=Amaral |first1=Kaisa |title=What should a carbon border measure look like? |publisher=Carbon Market Watch |date=25 November 2020 |url=https://carbonmarketwatch.org/2020/11/25/what-should-a-carbon-border-measure-look-like/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{amaral2020what, author = {Amaral, Kaisa}, title = {{What should a carbon border measure look like?}}, institution = {Carbon Market Watch}, year = {2020}, month = nov, url = {https://carbonmarketwatch.org/2020/11/25/what-should-a-carbon-border-measure-look-like/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }