Global Cooperation on Border Carbon Measures  Where should we start?

The paper examines the proliferation of border carbon adjustment (BCA) mechanisms, such as the EU CBAM, and the resulting risks of a 'spaghetti bowl' of incompatible standards. It argues that while comprehensive multilateral agreement on BCAs is hindered by political sensitivities and legitimacy disputes, strategic cooperation should first target technical areas. These include the measurement of greenhouse gas intensity, the determination of downstream coverage, the scope of emissions (Scope 1, 2, and 3), the crediting of foreign carbon prices, and the acceptance of carbon offsets. Such coordination is presented as essential to prevent trade frictions and support the capacity of producers in less developed economies to decarbonize.

• The rapid adoption of border carbon adjustment (BCA) instruments by various nations risks creating a 'spaghetti bowl' of differing requirements for measurement, reporting, and verification, which could restrict trade and hinder poverty alleviation and development.
• BCA regimes impose significant compliance costs on foreign producers, with a disproportionate impact on exporters from less developed economies due to limited national GHG reporting requirements, higher capital costs for decarbonization, and lack of public support.
• International cooperation is necessary to establish best practices for BCA design to prevent domestic policy-makers from ignoring the impacts on other nations or succumbing to domestic protectionist pressures.
• There is a critical need for mutual recognition or interoperability regarding the measurement of greenhouse gas (GHG) intensity at the product level, as current standards for project or installation levels are insufficient for carbon-based trade measures.
• Technical agreement is needed on the downstream extent of BCAs to ensure coverage only includes products where embedded carbon is a significant portion of the value, thereby avoiding high administrative costs and trade disruptions for goods with little climate benefit.
• The scope of emissions covered by BCAs—specifically whether to include Scope 2 (electricity) and upstream Scope 3 emissions—has significant practical impacts on producer advantages and the difficulty of compliance.
• There is an urgent but closing window of opportunity to agree on the technical details of how credits should be granted for carbon prices already paid in an export economy to ensure trade measures are effective and inclusive.
• The international community should determine whether BCAs should accept carbon offsets, including those from the Paris Agreement’s Article 6 or voluntary carbon markets, as a means to lower reported GHG intensity.

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} }