US and EU Proposals for Carbon Border Adjustment Mechanism

CED’s recent Solutions Brief “A Road Map Towards A Sustainable Clean Energy Transition During Economic and Geopolitical Uncertainty” noted that “companies in countries that price carbon will face higher prices than companies in jurisdictions which do not, leading to distortions in trade, a situation termed ‘carbon leakage.’” In order to preserve competitiveness in countries, such as the United States and Europe, that have more aggressive policies for emissions reduction, a carbon border adjustment mechanism (CBAM) is an approach that is under consideration.On December 14th, CED hosted a Trustee Briefing with Senator Bill Cassidy (R-LA) and Senator Sheldon Whitehouse (D-RI) on their Climate/Carbon Border Adjustment Proposals.Following is more background on the Senators’ proposals, as well as, one other in the Senate and the EU’s proposal.