This briefing was prepared for the European Parliament’s Committee on International Trade (INTA), as one of four complementary briefings on carbon border adjustment mechanisms. All four briefings are available on the European Parliament’s online database, ‘ThinkTank‘. Copyright remains with the European Parliament at all times.
This briefing discusses the possible reactions of the European Union’s larger trading partners to carbon border measures. Section 1 discusses experiences of carbon border adjustment-like regimes prior to the European Commission’s announcement of the Green Deal. It focuses on the EU Aviation Directive, the US policy debate, and the Californian CBA for electricity. Section 2 considers reactions to the Green Deal announcement, based on informal discussion with officials from major trading partners to the EU. It identifies positive and negative reactions to the principle of an EU CBA, concerns about its design, criticisms and potential policy responses by these partners. Section 3 discusses the implications of our findings. It points to several features in the design and introduction of an EU CBA mechanism that we believe will importantly affect how partners will react to such mechanism.