Methods for Crediting Carbon Prices under the CBAM
Author(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Sara Svensson
Building on previous work conducted ahead of the adoption of the CBAM Regulation with Phases I (2019-2020), II (2020- 2021) and III (2021-2022) of its project “Border Carbon Adjustments in the EU”, the European Roundtable on Climate Change and Sustainable Transition (ERCST) has extended its analysis of the evolving CBAM into a fourth phase, providing decision makers and stakeholders with a better understanding of critical issues as the CBAM proceeds from adoption to implementation.
Phase IV of the ERCST project is intended to provide in-depth analysis of the implementation phase of the CBAM as it progresses to its full operationalization. The present report is the second in a series of four reports that together form the fourth phase of the “Carbon Border Adjustment in the EU” project. Each of the reports provides analysis and reflection around issues identified as important at this stage in CBAM implementation. This report discusses topics ahead of the implementing act that will determine the details of how to credit carbon prices in third countries under the CBAM.
The report covers the background of why getting the crediting of carbon prices under the CBAM right is important; a broader context of methods for accounting for climate action in trade measures; an investigation of which prices will be credited under the CBAM; and the a discussion of the way forward.
