Interoperability or Fragmentation? The next test for border carbon adjustments

The author argues that as more jurisdictions implement border carbon adjustments (BCAs), the lack of harmonized standards for measuring, reporting, and verifying emissions could create a "trade-restrictive, costly mess." While full harmonization is deemed unrealistic due to differing national economic and political realities, the document proposes "interoperability" as a viable alternative. This approach would involve splitting emissions accounting into discrete modules, harmonizing basic reporting information, and mutually recognizing accredited verifiers. The author suggests that existing forums like the OECD's Inclusive Forum for Carbon Mitigation Approaches and the Climate Club are appropriate venues for this coordination, warning that interoperability will be harder to achieve once multiple regimes are fully operational.

• The proliferation of diverse systems for measuring, reporting, and verifying embedded emissions at borders risks creating a trade-restrictive and costly environment, which would disproportionately impact smaller producers and those in developing countries lacking resources for low-carbon transitions.
• Full harmonization of BCA standards is considered unrealistic because compliance requirements are typically rooted in a country's specific national carbon pricing regimes and unique economic and political realities.
• Interoperability can be achieved across the three stages of the compliance chain: measurement (by using discrete modules for different emission sources), reporting (by harmonizing basic firm and process information), and verification (through the mutual recognition of accredited verifiers).
• International coordination on BCA interoperability can be facilitated through existing forums such as the G7-spawned Climate Club (which has 43 members) and the OECD’s Inclusive Forum for Carbon Mitigation Approaches.

APA

Cosbey, A. (2025). Interoperability or Fragmentation? The next test for border carbon adjustments. International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/interoperability-or-fragmentation-border-carbon-adjustments

Chicago

Cosbey, Aaron. Interoperability or Fragmentation? The next test for border carbon adjustments. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/policy-analysis/interoperability-or-fragmentation-border-carbon-adjustments.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=Interoperability or Fragmentation? The next test for border carbon adjustments |publisher=International Institute for Sustainable Development |date=29 October 2025 |url=https://www.iisd.org/articles/policy-analysis/interoperability-or-fragmentation-border-carbon-adjustments |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2025interoperability, author = {Cosbey, Aaron}, title = {{Interoperability or Fragmentation? The next test for border carbon adjustments}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = oct, url = {https://www.iisd.org/articles/policy-analysis/interoperability-or-fragmentation-border-carbon-adjustments}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }