Research on the Impact of the EU’s Carbon Border Adjustment Mechanism: Based on the GTAP Model

There is now widespread agreement that the world community must actively combat climate change and advance green low-carbon development. In order to deal with issue of carbon leakage caused by rising cost industrial production as a result policies reduce greenhouse gas (GHG) emissions, EU intends implement Carbon Border Adjustment Mechanism (CBAM) in its entirety starting 2026, pilot phase which will begin 2023. This shows progressive emergence new international trade system driven “climate actions”, “carbon peaking”, neutrality”, have broad far-reaching impact on China’s foreign industry. As more industries are being covered EU’s CBAM, it exert negative social welfare export China, largest trading partner EU, even though existing mechanism has only limited economic energy paper presents policy proposals address issues effects tariff” methodically analyzing CBAM’s operation process and, via development models, determining mechanism’s influence welfare, exports.