The EU Carbon Border Adjustment Mechanism: Customary International Law?

The challenge of squaring effective climate policy and its attendant costs with the realities of international trade has driven several novel solutions. Among them, Carbon Border Adjustment Mechanisms (‘CBAMs’) have emerged as the preeminent option, evening the trading environment by quelling the problem of emission ‘leakage’ via trade from less ambitious to more ambitious States. As the European Union (‘EU’) finalises the implementation of its CBAM, pushes ahead with its Green Deal, and continues to write so-called ‘climate clauses’ into its free trade agreements (‘FTAs’), the question of CBAMs as a matter of international law is rapidly growing in importance and relevance. This contribution analyses and contrasts EU practice with that of other States and argues that, though so-called ‘climate clubs’ are emerging among major economies, the customary development of CBAMs is still in its relative infancy as a matter of universal practice. It will ultimately fall to the momentum of other major economic actors, among them the United States (‘US’) and the so-called ‘BRICS’ economies of Brazil, Russia, India, the People’s Republic of China (‘PRC’), and South Africa, to meaningfully solidify this fledgling custom.