The Europe Jacques Delors think tank published a report on the acceptability of the Carbon Border Adjustment Mechanism (CBAM) on Wednesday 5 October, the day before the second session of interinstitutional negotiations (see EUROPE 13035/20) on the CBAM Regulation are to be held. The author of the report, Pierre Leturcq, promotes a spirit of cooperation between the EU and its partners in order to gain acceptance for CBAM.
The operation of the CBAM as currently negotiated is likely to pass the test of World Trade Organization (WTO) rules, according to the author. However, one must be wary of certain details that could discredit the European instrument among partners.
This is the case for the export rebates demanded by Parliament (see EUROPE 12977/12) and the use of CBAM revenues.
Work is also still needed on taking into account the different carbon pricing systems of the EU’s partners. Pierre Leturcq believes that it is essential to avoid certain bodies, such as the “climate club”, or other plurilateral discussion formats leading to exemptions from CBAM among members. This would reinforce the idea of “two-tiered climate and trade diplomacy”, he says.
Instead, he recalls the recommendations of his colleagues Geneviève Pons and Pascal Lamy, who refer to a “comparability forum” on the equivalence of carbon pricing systems.
See the report: https://aeur.eu/f/3f8 (Original version in French by Léa Marchal)