A study by the Potsdam Institute for Climate Impact Research suggests that the EU's Carbon Border Adjustment Mechanism may fail to bring major emerging economies like India and China into a global carbon pricing alliance. While the policy effectively reduces carbon leakage and encourages advanced nations to adopt internal carbon markets, structural economic barriers remain for large developing exporters. The research highlights a divide in global trade, where a high carbon tariff motivates alignment in some regions but creates a policy deadlock in others. This suggests that unilateral trade mechanisms may not be enough to mandate global climate cooperation without more flexible economic incentives.
