Are Unilateral Trade Measures in the Climate Crisis the End of Differentiated Responsibilities? The Case of the EU Carbon Border Adjustment Mechanism (CBAM)

The European Commission has proposed a Carbon Border Adjustment Mechanism (CBAM) as part of its European Green Deal (EGD). While the EGD aims to increase prices for carbon emissions for EU producers, CBAM aims at countering competitive disadvantages and at preventing so-called carbon leakage. In the present chapter, we consider CBAM’s legality under the EU’s international trade obligations and highlight how, in its proposed format, it is bound to undercut the principles of Common but Differentiated Responsibilities (CBDR) and Special and Differential Treatment (SDT). CBAM subjects all imported products, no matter their origin, to the same carbon price. Against the background of competing normative arguments, concerns of practicality, as well as issues of powerplay, we ask whether the European Union’s CBAM proposal could legally differentiate between countries, and whether there are legal arguments suggesting that it should do so. We argue that there is indeed scope for differentiation, even if the criteria for this differentiation remain highly contested in theory and practice.