Pulling up the carbon ladder? Decarbonization, dependence, and third-country risks from the European carbon border adjustment mechanism

• Country risks depend on exposure and the ability to adapt an EU CBAM. Relative risk levels vis-à-vis CBAM are unevenly distributed across globe. Long-term carbon lock-in combined with low trade diversification raises levels. MRV capacity is key verifying emissions reductions. Sector-specific reporting poses a challenge many developing countries. Since Commission announced introduction of border adjustment mechanism (CBAM) within European Green Deal, debates intensified its effectiveness for climate action, adhering WTO regulations, potential wars China US. We argue that implications affected countries, especially in Global South, have been underrepresented so far. assess countries’ relative two scenarios: i) addressing only emissions-intensive sectors ii) targeting whole economy. The paper maps these scenarios using index encompassing export structure their intensity, reduction targets, institutional capacities monitor report product-based emissions. quantitative analysis reveals impacts spectrum impacted nations varies between analysed scenarios, but both cases most countries at relatively high located Africa. Three qualitative case studies covering Mozambique, Bosnia Herzegovina, Morocco evaluate relations, energy policies, capacities, special focus monitoring, verification (MRV) sheds light different patterns vulnerability policy options increase resilience.