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Abstract

This briefing provides a legal assessment – under WTO and EU law - of three policy options for an EU carbon border adjustment mechanism. These options are, first, a carbon tax adjusted at the border; second, the inclusion of importers under the EU emission trading scheme; and, third, import tariffs on products from third countries that do not pursue climate policies in line with the Paris Agreement. In the first part of the briefing, these three policies are evaluated against the benchmark of vulnerability to WTO legal challenge. The second part of the briefing assesses the EU decision-making procedures that are applicable to the three policies and the varying degrees of efficiency and democratic participation they imply.

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