A growing number of states and international organizations, including the EU and the US, are envisaging carbon border adjustment mechanisms (CBAMs) as a means to implement their climate policies. From an economic perspective, CBAMs are instruments aiming to level crossborder trade between countries that implement uneven carbon pricing schemes. From a legal perspective, CBAMs are considered ‘general exceptions’ to free trade, whose lawfulness is debated in the context of the World Trade Organization (WTO). This article develops a systemic analysis of CBAMs, notably the EU CBAM, under general and particular international law, and argues that they could be framed under the specific exception of ‘countermeasures’ under treaty law, particularly the General Agreement on Tariffs and Trade (GATT), thus fundamentally establishing a presumption of legality.
Journal of World Trade