Scaling carbon clubs under CBAM: incentives and asymmetric burdens (opens in new tab)

The European Union’s Carbon Border Adjustment Mechanism (CBAM) is the first large-scale climate-trade instrument with the potential to reshape global carbon pricing incentives. Its implementation pressures countries without explicit carbon prices to reconsider their domestic strategies and their positions in emerging climate clubs. Yet it remains unclear whether CBAM can anchor an expanding carbon pricing coalition, and at what environmental, economic, and distributional cost. Here we develop...