Becoming liable for the EU’s carbon border adjustment mechanism (CBAM) would nullify any cost-reduction benefit from a lower carbon price for UK companies that trade closely with the EU. That said, the CBAM would have less impact on domestically-focused firms, and the wider economic impact of the mechanism on the UK would also depend on how exporters react and how imports are affected.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services