A recent study by the Asian Development Bank (ADB) investigates the impact of the European Union’s (EU) carbon border tax (CBAM). Aimed at reducing carbon emissions from imported goods, the tax is unlikely to significantly curb climate change and will only have a modest negative impact on Asian economies. The report highlights CBAM’s limitations, notably that the plan alone won’t solve carbon leakage, and that a global carbon pricing system is needed for a bigger impact. Its recommendations include the expansion of carbon pricing schemes in Asia and standardising methods to track carbon emissions in products.
