Download This PaperAre Trade Measures to Tackle the Climate Crisis the End of Differentiated Responsibilities? The Case of the EU Carbon Border Adjustment Mechanism (CBAM)
32 Pages Posted: 24 Jan 2022 Last revised: 15 Sep 2022
Date Written: January 10, 2022
Abstract
The European Commission has proposed a Carbon Border Adjustment Mechanism (CBAM) as part of its European Green Deal (EGD). While the EGD aims to increase prices for carbon emissions for EU producers, CBAM aims at countering competitive disadvantages and at preventing so-called carbon leakage. In the present article, we consider CBAM’s legality under the EU’s international trade obligations and highlight how, in its proposed format, it is bound to undercut the principles of Common but Differentiated Responsibilities (CBDR) and Special and Differential Treatment (SDT). CBAM subjects all imported products, no matter their origin, to the same carbon price. Against the background of competing normative arguments, concerns of practicality, as well as issues of powerplay, we ask whether the European Union’s CBAM proposal could legally differentiate between countries, and whether there are legal arguments suggesting that it should do so. We argue that there is indeed scope for differentiation, even if the criteria for remain highly contested in theory and practice.
Keywords: Climate Crisis, Carbon Border Adjustment Mechanism (CBAM), International Trade Law, Common but Differentiated Responsibilities (CBDR), Special and Differential Treatment (SDT), General Exceptions
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