The EU is better known for considered diplomacy than picking fights. But it has come out swinging punches with its approach to a carbon border tax. EU assertiveness in laying out a Carbon Border Adjustment Mechanism (CBAM) is driven to a large extent by political and economic necessity. The ‘Fit for 55’ and ‘net zero’ policy targets mean Europe needs to start decarbonising its industrial sector fast. A clear implication of this is ‘carbon leakage’. Imposing decarbonisation costs on European industries will erode competitiveness and drive a shift in production away from the EU. The potential economic & political ... (full story)