Carbon Border Adjustment Mechanism

Medha111 May, 2023Education

The Carbon Border Adjustment Mechanism (CBAM) is a proposed policy by the European Union (EU) to address the issue of carbon leakage, which occurs when companies relocate their production to countries with lower environmental standards to avoid carbon pricing. The CBAM aims to level the playing field for EU companies by imposing a border tax on imports from countries with lower carbon prices or less ambitious climate targets.