New Report on CBAM Points to Significant Impacts on African Exports

A groundbreaking study released by the African Climate Foundation and the Firoz Lalji Institute for Africa at the London School of Economics and Political Science  raises concerns about the economic ramifications of the EU’s Carbon Border Adjustment Mechanism (CBAM) on Africa. The report finds that it is likely to hit the competitiveness of African exports, particularly industrial exports if product coverage expands over time. It also notes that the CBAM process introduces administrative hurdles to market access by African countries, which historically struggled to access the European market. In a hypothetical model in which the CBAM was applied to all imports, it could reduce total exports to the EU from African countries by 5.72% and reduce Africa’s GDP by 1.12% (equivalent to €31 billion in 2021 levels of African GDP).

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