carbon border adjustment

Syllable breakdown

Dictionary meaning

a trade policy mechanism that imposes a charge on imported goods equivalent to the carbon cost that would have been incurred had those goods been produced under the importing jurisdiction's carbon pricing regime; designed to prevent carbon leakage, whereby production shifts to countries with weaker climate regulations to avoid carbon costs, a carbon border adjustment creates a level playing field between domestic producers subject to carbon pricing and foreign competitors who are not; the European Union's Carbon Border Adjustment Mechanism is the most prominent example