The external impact of EU climate policy: political responses to the EU’s carbon border adjustment mechanism

Abstract

With the adoption of a Carbon Border Adjustment Mechanism (CBAM) the European Union (EU) is extending its carbon price to certain imported goods to advance the decarbonisation of European energy-intensive industries while preventing carbon leakage. The CBAM carries the potential to drive climate policy efforts in non-EU countries but also poses significant economic and political challenges to the EU’s trade partners. Accordingly, the CBAM has stirred up a vibrant international debate about the adequacy and legitimacy of unilateral climate policies. This article systematically analyses political responses to the EU CBAM to assess if and how it is driving climate policies internationally. To that end, it empirically maps political responses to the EU CBAM (covering opposition, cooperation and policy adoption) of 32 countries from 2019 to 2024 distinguishing across three perspectives on CBAM’s significant others. The article finds that the CBAM has triggered a wide range of political reactions across all countries analysed, highlighting its political relevance. Responses thereby seem to have shifted from opposition towards cooperation and policy adoption from 2021 onwards. Furthermore, the CBAM seems to have driven the development of climate policies in several countries, suggesting that unilateral climate policies can work as a climate policy driver internationally. The article advances the academic literature on unilateral climate measures as well as the literature on the EU’s regulatory power.