The Carbon Border Adjustment Mechanism: a new european tax to address carbon leakage

Abstract

In the framework of strengthening policies to address the global climate crisis, the European Union, through Regulation 2023/956, has adopted the Carbon Border Adjustment Mechanism (CBAM), a fiscal measure imposed on imports of carbon-intensive products originating from non-EU countries. With this instrument, the EU seeks to prevent its regulatory efforts for environmental protection from being undermined by third countries lacking adequate environmental strategies. The climate emergency, however, is a global challenge that requires the active contribution of economic actors worldwide, whose conduct — also through the application of fiscal levies — can be steered towards greener or at least more sustainable production practices. Nevertheless, the phased implementation of the CBAM, which has not yet fully entered into force, together with the broader implications it may entail beyond the strictly environmental dimension, suggest that a medium- to long-term horizon will be necessary before the mechanism can yield tangible results, not only in terms of reducing pollution but also in fostering greater balance in international trade relations.