CBAM Between Trade Law And Climate Justice: Conditional WTO Defensibility And CBDR-RC Sensitive Design Reform
- IJLLR Journal
- 3 days ago
- 1 min read
Saakaar Butta, B.A.LL.B. (Hons.), Jindal Global Law School
ABSTRACT
The European Union’s Carbon Border Adjustment Mechanism (CBAM) links market access in selected emissions-intensive sectors to a carbon price pegged to the EU Emissions Trading System (ETS).Presented as a response to carbon leakage, CBAM operates at the intersection of WTO non- discrimination disciplines and climate justice debates under the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). This paper argues that CBAM’s WTO defensibility is conditional rather than assured: the coexistence of free ETS allowances, conservative default emissions values and limited recognition of foreign climate measures risks less favourable treatment for imports and pushes the EU towards a contested reliance on GATT Article XX. At the same time, CBAM’s uniform border pricing externalises part of the EU’s adjustment costs onto developing-country exporters without built-in differentiation or compensatory finance, placing the measure in structural tension with CBDR- RC. The paper sketches a redesign pathway that aligns CBAM more strictly with the internal regime, strengthens producer-specific emissions verification, avoids export rebates, incorporates CBDR-RC-consistent differentiation and recycles a share of revenues towards decarbonisation support and adaptation in affected developing countries.
