European Union Carbon Border Adjustment Mechanism: Content Review and China’s Emergency Response

Xu Xin, Wu Jinchang

Abstract: As the world’s first carbon tariff system to be implemented, the EU Carbon Border Adjustment Mechanism (CBAM) has been given two main objectives: to prevent carbon leakage and to maintain a fair global industrial competition. However, when it comes to preventing carbon leakage, it ignores the logic of attributing responsibility for carbon leakage, unilaterally adopts market-based regulatory schemes, and has a strong tendency towards climate unilateralism. On the issue of maintaining the order of fair competition in the industry, through leading carbon pricing, it transfers domestic endowment advantages in the import and export links, and imposes trade restrictions on other countries, with prominent characteristics of trade protectionism. As one of the EU’s most important importers, China will be deeply affected by its CBAM within its own domestic climate governance process, export trade and other areas. In view of this, at present, China should extend the buffer period of its own system by applying WTO rules and establishing international carbon tariff rules at the international level and at the domestic level, by giving full play to policy advantages, promoting carbon trading market and enterprise carbon tax system construction, and improving its own system of dealing with endogenous capacity. Finally, on the basis of both international and domestic measures, China must safeguard its national interests to the greatest possible extent while aiding in world development.

Keywords: European Union Carbon Border Adjustment Mechanism, Climate Unilateralism, Trade Protectionism Carbon Leakage, Carbon Trading