1 What is a Carbon Border Adjustment Mechanism (CBAM)? 7

1.1 What can a CBAM achieve? 7

1.2 How does a CBAM work? 9

2 UK CBAM 10

2.1 Policy development 10

2.2 Design 12

2.3 Stakeholder views on UK CBAM 14

3 Interaction with EU CBAM 18

3.1 EU CBAM 18

3.2 Differences in design 18

3.3 Linking the UK and EU emissions trading systems 21

3.4 Implications of EU CBAM for imports to the UK 22

4 International trade considerations 30

4.1 Compliance with global trade rules 30

4.2 Effect on developing countries 36

5 Global cooperation 42

6 Further Reading 45

Effectiveness of CBAMs 45

UK CBAM 45

EU CBAM 45

Trade considerations 46

United States 46