427Received 21.06.2022. Revised 11.01.2023. Accepted 30.01.2023.
Abstract. On March 15, 2022 the Carbon Border Adjustment Mechanism (CBAM, also known as the EU Carbon Tariff) was preliminarily approved by the EU Council. It was planned to be formally implemented since January 1, 2023, with a three-year transition period. This means that EU member states support the implementation of carbon tariff policies. As the world’s first proposal to address climate change in the form of a carbon tariff, the carbon border adjustment mechanism will have a profound impact on global trade. Our study aims to analyze the implications and further development of CBAM. The carbon tax leads to the promotion of an accelerated and healthy carbon market, stimulating the growth of demand for green electricity, and rooting the authentication of low and zero carbon products. However, the practical implementation of the introduction of the tax still faces many obstacles. CBAM widens the gap between developed and developing countries in terms of GDP and wealth. This could exacerbate income and wealth disparities between rich and poor economies and further undermine the ability of some low-income countries to decarbonize their economies. To ensure a fair transition to a low-carbon economy and prevent excessive negative impacts on developing countries during the transition period, the IMF must play a key role in identifying and addressing the cross-border spillovers of climate policy, especially those that affect the balance of payments and growth trajectories of vulnerable countries. As an option to address this side impact, we briefly discussed the possibility of creating an Equitable Decarbonization Fund with CBAM funds to support decarbonization projects in low-income countries and the development of green technologies.
Keywords: Carbon Border Adjustment Mechanism, carbon tax, implications, policies, International Monetary Fund
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