1. Crafting a Robust U.S. Carbon Border Adjustment Mechanism
- Author:
- Sanam Rasool, William Alan Reinsch, and Thibault Denamiel
- Publication Date:
- 08-2024
- Content Type:
- Policy Brief
- Institution:
- Center for Strategic and International Studies (CSIS)
- Abstract:
- The introduction of a carbon border adjustment mechanism (CBAM) in the United States presents an intricate policy challenge at the intersection of climate action and international trade. With countries around the world integrating climate considerations into their trade policies, the United States is under growing pressure to develop and implement its own CBAM. This policy tool, already adopted by the European Union, is geared toward leveling the playing field for domestic industries while promoting global climate action and accountability. A future U.S. CBAM could serve as a vital instrument in the nation’s transition toward a net-zero economy, encouraging domestic carbon footprint reduction and driving trading partners to adopt cleaner practices. However, crafting and rolling out such a mechanism comes with knotty challenges, ranging from choosing optimal carbon accounting methods and pricing to warding off potential trade disputes and garnering global collaboration. As the United States charts its course through this complex policy landscape, it has the opportunity to shape global climate action while safeguarding its economic interests.
- Topic:
- Climate Change, International Trade and Finance, Economy, and Carbon Border Adjustment Mechanism (CBAM)
- Political Geography:
- North America, Global Focus, and United States of America