Data Dashboard: Asia-Pacific Trade Exposure to the European Carbon Border Adjustment Mechanism

Abstract

The European Union (“EU”) operates a regional Emissions Trading System, a cap-and-trade scheme with declining emissions allowances designed to support economy-wide decarbonization. To address the import of goods from other jurisdictions not subjected to similar carbon prices, the EU is taxing carbon at its borders through the Carbon Border Adjustment Mechanism (“CBAM”). Jurisdictions exporting large volumes of CBAM-covered goods to the EU face uncertainty regarding their ongoing exposure due to fluctuations in trade volumes, emissions intensities, and carbon prices. The dashboard developed in this project addresses this problem by enabling users to explore scenario-based modeling for the 15 largest Asia-Pacific (“APAC”) exporters to the EU. Users can test various fluctuating assumptions across future trade scenarios to estimate and contextualize potential CBAM liabilities. In doing this, the user can identify key vulnerabilities to inform targeted policy interventions across the APAC region.