🌿 The European Union's Carbon Border Adjustment Mechanism: A Green Revolution

#CarbonBorderTax #EUClimatePolicy #GlobalTrade #ClimateChange #CBAM #CarbonEmissions
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#CarbonLeakage #Sustainability #GreenEconomy #ClimateActionPlan #EUTradePolicy
#GlobalEconomicImpact #CarbonTaxation #EmissionsReduction #TradeRelations

The European Union has already implemented an internal carbon tax under the Emissions Trading System (ETS), which charges power stations and large industrial installations for each ton of carbon dioxide they emit. With emissions permits costing around €90 per ton, the ETS is designed to incentivize companies to reduce their carbon emissions within the EU.

However, the ETS does not prevent Europeans from purchasing carbon-intensive products from countries that do not have domestic carbon taxes. This phenomenon, known as "carbon leakage," means that the ETS alone is insufficient to achieve a significant reduction in global CO2 emissions. To address this issue, the CBAM has been introduced. It requires importers to pay for the emissions embodied in the goods they import, with rates adjusted to reflect the carbon taxes paid in the country of origin.

What is the carbon border adjustment mechanism?
What is the EU carbon border adjustment mechanism in 2026?
When was CBAM introduced?
What is the CBAM regulation May 2023?

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