Global Cooperation on Border Carbon Measures  Where should we start?

This research paper by the International Institute for Sustainable Development (IISD) analyzes the proliferation of Border Carbon Adjustment (BCA) instruments, such as the EU CBAM, and argues for a strategic approach to international cooperation. The author suggests that because comprehensive multilateral agreements are hindered by political sensitivities and existing design choices, the international community should first prioritize cooperation on technical, 'low-hanging fruit' issues to avoid trade restrictions and reduce compliance costs for exporters, particularly those in less developed economies.

• There is a growing global trend toward implementing Border Carbon Adjustment (BCA) mechanisms to prevent 'carbon leakage,' where production and emissions shift to countries with weaker climate policies. While the European Union's CBAM is already in place, the United Kingdom intends to implement one by 2027, and other nations including Australia, Canada, the United States, and Chinese Taipei are considering or have legislated similar regimes.
• The lack of international cooperation on BCAs creates three primary risks: a 'spaghetti bowl' of incompatible measurement and reporting requirements that restrict trade; high compliance and decarbonization costs that disproportionately affect producers in less developed economies; and the potential for trade frictions caused by domestic protectionist pressures or a failure to consider the capacity of foreign partners.
• The author proposes a strategic approach to cooperation that avoids politically charged arguments and instead focuses on technical alignment. This gradual alignment on technical issues is intended to eventually build the trust and willingness necessary to address more sensitive aspects of BCA design.
• A critical technical area for cooperation is the measurement of greenhouse gas (GHG) intensity at the product level. Because no broad international standard currently exists for calculating embodied carbon in goods, there is a risk that each jurisdiction will develop its own sui generis methodology, necessitating mutual recognition or inter-operability to prevent trade restrictions.
• Technical cooperation is needed to determine the appropriate scope of BCAs, specifically regarding how far downstream in the value chain they should extend and which emissions are covered. The author suggests coverage should only extend to products where embedded carbon is a significant portion of the value to avoid high administrative costs and disruptive trade impacts. Additionally, decisions on whether to include Scope 2 (electricity) and upstream Scope 3 emissions have significant impacts on producer advantages and compliance difficulty.
• There are unresolved technical questions regarding how to grant credits for carbon prices already paid in the export economy and whether reported embodied carbon can be lowered through offsets. The author notes that the EU and UK CBAMs have not yet definitively answered the crediting question, providing a window for non-controversial discussion.

APA

Cosbey,, A. (2024). Global Cooperation on Border Carbon Measures  Where should we start? International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/global-cooperation-border-carbon-measures-where-should-we-start

Chicago

Cosbey,, Aaron. Global Cooperation on Border Carbon Measures  Where should we start? International Institute for Sustainable Development, 2024. https://www.iisd.org/articles/policy-analysis/global-cooperation-border-carbon-measures-where-should-we-start.

Wikipedia

{{cite report |last1=Cosbey, |first1=Aaron |title=Global Cooperation on Border Carbon Measures  Where should we start? |publisher=International Institute for Sustainable Development |date=8 October 2024 |url=https://www.iisd.org/articles/policy-analysis/global-cooperation-border-carbon-measures-where-should-we-start |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2024global, author = {Cosbey,, Aaron}, title = {{Global Cooperation on Border Carbon Measures  Where should we start?}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = oct, url = {https://www.iisd.org/articles/policy-analysis/global-cooperation-border-carbon-measures-where-should-we-start}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }