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Bridging Mechanisms for Synergistic Impact: Uniting the European Union’s Carbon Border Adjustment Mechanism and Article 6.2 of the Paris Agreement

Bridging Mechanisms for Synergistic Impact: Uniting the European Union’s Carbon Border Adjustment Mechanism and Article 6.2 of the Paris Agreement

Year Published

2024

Contributing Organizations

Climate Action Center of Excellence (CACE)
HFW

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic
Carbon Markets & Carbon Finance
Topic 2
Climate Reporting
Topic 3
Carbon Accounting

Target Audience

Advisors & Consultants
Financial Services Providers
Governments & Policymakers
Real Economy Corporates

Relevant Geography

Global
Bridging Mechanisms for Synergistic Impact: Uniting the European Union’s Carbon Border Adjustment Mechanism and Article 6.2 of the Paris Agreement

Resource Description

This briefing explores how the EU’s Carbon Border Adjustment Mechanism (CBAM) could align with Article 6.2 of the Paris Agreement. It reviews CBAM’s objectives, Article 6.2’s cooperative framework, and potential options for integration.

Why This Matters

Linking CBAM and Article 6.2 could address equity concerns, mobilize climate finance, and ensure emissions cuts rather than trade diversion.

Key Insights

  • CBAM, launching in 2026, imposes carbon prices on imports but raises fairness and trade concerns
  • Article 62 enables countries to trade Internationally Transferred Mitigation Outcomes (ITMOs), fostering investment and partnerships
  • Synergies include using ITMOs for CBAM compliance or reducing CBAM liabilities through co-existence
  • CBAM revenues, projected at €9 billion annually by 2028, could support Article 62 projects and capacity building in developing countries
  • Key challenges are ensuring additionality, NDC alignment, and prioritizing high-impact transition projects

Secondary File Resources

Secondary Resource Link(s)
Bridging mechanisms for synergistic impact

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