The development, changes and responses of the European Union carbon border adjustment mechanism in the context of global energy transition

Abstract

Energy production and consumption is the primary source of global carbon emissions. In order to achieve the goal of Intended Nationally Determined Contributions (INDCs) in the Paris Agreement, countries around the world have set off an upsurge of energy transition. The EU has ambitious INDCs. The Energy crisis has made it accelerate the energy transition, thus promoting the development of its circular economy. However, the EU focuses on carbon leakage during this process. To address this issue and maintain the competitiveness of EU industries during the transition, the EU proposed the Carbon Border Adjustment Mechanism (CBAM). The EU proposed the background and development process of the CBAM, and organized the core content of the tripartite plan and final bill of the European Commission, European Parliament, and European Council. What's more, the framework system of the CBAM is clarified, and further analysis is conducted on the future development of CBAM of the EU based on various factors. In response to the new development of the CBAM, it is suggested that developing countries should adhere to the principle of common but differentiated responsibilities on the international front and attempt to build and improve a carbon market system to partially offset carbon tariffs. Finally, we should strengthen the research on the response plan of the EU CBAM and establish an effective communication mechanism with the EU, in order to better cope with the impact of the CBAM on the trade of developing countries in the future.