How to View the EU Carbon Border Adjustment Mechanism? — A Study Based on the Perspective of International Political Economy

Abstract

The formal implementation of the European Union’s Carbon Border Adjustment Mechanism (CBAM) marks a critical paradigm shift in global climate governance, transitioning from cooperative multilateralism under the UNFCCC framework toward unilateral geoeconomic regulation. Grounded in the theoretical lens of International Political Economy (IPE), this paper critically analyzes how the EU leverages its asymmetric market power and structural leverage—often characterized as the "Brussels Effect"—to project extraterritorial climate standards and reshape global value chains (GVCs). This study finds that while CBAM functions as a "unilateral alternative" to overcome collective action deadlocks in UN climate negotiations, it simultaneously serves as a strategic instrument to reinforce the EU’s dominant position in high-value-added production nodes. Crucially, by applying a uniform carbon pricing threshold that fails to operationalize the principle of Common But Differentiated Responsibilities (CBDR), CBAM disproportionately shifts compliance burdens onto developing manufacturing economies. In the long run, rather than establishing a cohesive global carbon benchmark, the mechanism risks fueling trade friction, regulatory retaliation, and the institutional fragmentation of the global green governance architecture into an overlapping "spaghetti bowl" of competing carbon regimes. The paper concludes with strategic adaptation recommendations for developing economies to enhance domestic carbon pricing, standardize MRV protocols, and foster multilateral trade alignments.