The beginning of Carbon Border Adjustment Mechanisms (CBAMs) Video

As economies around the world set regulations for carbon emissions….and with those regulations come taxes for carbon producing companies….there is the natural tendency for heavy carbon emission producers to move manufacturing to less stringent countries.

This is called Carbon Leakage.

But it might not be so easy for companies to avoid the tax after all.

Per this video, the EU is developing a Carbon Border Adjustment Mechanism (CBAM) that will add a carbon tax on the finished product as it comes back into the EU.

The United States is working on its own CBAM.

Other countries will follow.

The “Pay me now or pay me later” approach of the CBAM is to deter manufacturers from incurring the cost of relocation; and to use that money to reduce carbon emissions in their existing plants.