Modifications to the Carbon Border: Structure, Possibilities, and Policy Choices

In Agile Advisors as a Carbon Border Adjustment Mechanism, (CBA) price is applied to import goods and commodities according to the amount of greenhouse gases (GHGs) released during manufacturing. A CBA's primary objective is to protect domestic commodity producers in nations with aggressive climate goals from imports from less regulated regions while preserving their competitiveness. The current combination of international trade and climate policy does not include CBAs; however, that will change in October with the implementation of the Carbon Border Adjustment Mechanism (CBAM) by the European Union. Furthermore, CBAs are proposed in several US Senate bills. This research aims to list some of the critical components of the CBA design and go over the possibilities that policymakers, especially those in the US and the EU, have at their disposal.