Briefings Aligning the UK’s climate, trade and development policies: The case of the UK Carbon Border Adjustment Mechanism (CBAM)
Aligning the UK’s climate, trade and development policies: The case of the UK Carbon Border Adjustment Mechanism (CBAM)
This joint report by TJM and Transform Trade highlights the risks of a
Carbon Border Adjustment Mechanism (CBAM) for developing countries.
It calls for the UK to mitigate the potentially negative impacts of a CBAM on developing countries via sensitive policy design, such as exempting some developing countries from the scope of the scheme, or by providing long transition periods.
Recommendations say the UK Government should:
Carefully assess the real risk of future carbon leakage.
Conduct a comprehensive development impact assessment of a possible UK CBAM.
Engage actively and constructively with developing countries throughout any CBAM design.
Exempt developing countries from any future UK CBAM or provide lengthy transition periods.
Ringfence the revenues generated by any future UK CBAM to support the green transition in developing countries.
Design default values which are less punitive on countries which lack monitoring and verification capabilities, and consider establishing sectoral price observatories to monitor supply chain impacts.
Ensure the UK is meeting and enhancing its commitment to the international climate financing necessary to support developing countries meet the challenges of the climate emergency, including but not limited to, decarbonising their industrial sectors.
Step up efforts to ensure a supportive policy framework for and practical progress in the transfer of green technology.
Read the press release
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CBAM trade and climate
