Future Tense

Taxing carbon on the border and at sea

10 snips
Sep 11, 2025
Join Sanjay Patnaik, Director at the Brookings Institute, Peter Bridgewater, Honorary Professor at ANU, and Anna Trugman from UC Santa Barbara as they delve into the EU's new carbon border tax and its potential impacts on global trade. They discuss the International Maritime Organisation's carbon levy for shipping and its challenges. The discussion also highlights China's Great Green Wall project and innovative techniques to measure tree stress, emphasizing the crucial role forests play in climate change mitigation and resilience.
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INSIGHT

CBAM Levels Carbon Playing Field

  • The EU's Carbon Border Adjustment Mechanism (CBAM) taxes embedded CO2 in imports to level the playing field with EU manufacturers.
  • It starts with reporting until end-2025 and becomes payable from 2026 to allow industries to adapt.
INSIGHT

How CBAM Is Priced

  • Foreign manufacturers must buy one certificate per tonne of CO2 embedded in products priced at the EU ETS weekly average.
  • Domestic carbon prices in exporters' countries can be credited against the CBAM, reducing the border payment.
ADVICE

Implement Domestic Carbon Pricing

  • Countries facing CBAM should implement domestic carbon pricing to avoid paying border taxes and retain revenue.
  • Adopting internal carbon prices also lets governments control and spend revenue locally rather than sending payments to the EU.
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