The EU CBAM and the U.S. Inflation Reduction Act: Squaring the Transatlantic Circle?

Faced with the existential challenge of climate change, the U.S. Inflation Reduction Act (IRA) and the EU’s Carbon Border Adjustment Mechanism (CBAM) are both designed to reduce carbon emissions. But their reliance on different instruments to incentivize decarbonization both at home and abroad could lead to frictions in the transatlantic economic relationship and strain the international trading system.

This event seeks to identify avenues for bridging differing U.S. and EU climate policy starting points in a way that strengthens the transatlantic relationship and advances the decarbonization goals of the UNFCCC Paris Agreement. Can the German government Climate Club idea provide a forum for reconciling the EU’s price-tariff approach in the CBAM with the U.S. subsidies-based IRA? How will CBAM and the IRA affect decarbonization efforts of emerging and developing economies and transatlantic commitments to financing those efforts? What are the potential impacts of this year’s U.S. and EU elections on harmonizing transatlantic approaches to climate and trade?

Panelists

Emily Lydgate, Professor of Environmental Law, University of Sussex
Shuting Pomerleau, Deputy Director of Climate Policy, Niskanen Center
Todd Tucker, Director, Industrial Policy and Trade, Roosevelt Institute
Charlotte Unger, Senior Research Associate, Research Institute for Sustainability Helmholtz Centre Potsdam

Moderator

Peter Rashish, Vice President & Director, Geoeconomics Program, AGI

This event will convene via Zoom. Please contact Geoeconomics Program Officer Mr. Yixiang Xu at yxu@aicgs.org with any questions.

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This event is made possible by support from the Heinrich Boell Foundation.