Carbon border adjustment methods

On July 14, 2021, the European Commission announced its proposal for a Carbon Border Adjustment Mechanism (CBAM), intended to equalize carbon pricing for domestic products and imports into the EU. Five days later, in the US, Senator Chris Coons (D-DE) and Representative Scott Peters (D-CA) introduced the FAIR Transition and Competition Act, a border carbon tariff on fossil fuels and carbon-intensive commodities. Although seemingly similar, the EU and US initiatives differ markedly in both motivations and methods. Comment from Aaron Cosbey, senior associate at the International Institute for Sustainable Development, is also presented.