Environmental Regulation and Its Unintended Consequences on Cross-Border Trade: Ex-amining Socio-Institutional Barriers in the Carbon Border Adjustment Mechanism (CBAM) Implementation for UK-Netherlands Shipping Trade through the Multi-Level Perspective
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2024-06-28
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en
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This research examines the practical implications and unintended consequences of the Carbon Border Adjustment Mechanism (CBAM) on UK-Netherlands shipping trade. The shipping sector faces new challenges with CBAM's introduction under the EU's Green Deal, aiming for carbon neutrality by 2050. CBAM prevents carbon leakage by imposing the same carbon costs on imported goods as those produced within the EU. Using the Multi-Level Perspective framework, this study identifies socio-institutional barriers during CBAM’s initial implementation from October 2023 through observations at a customs agency, interviews, and document analysis.
Key barriers include regulatory challenges, organizational hurdles, communication issues, perception gaps, and Brexit-related complications. The findings reveal significant administrative burdens and potential trade conflicts, suggesting CBAM may inadvertently act as a trade barrier, disproportionately affecting smaller businesses and low-income countries, and raising consumer prices. While CBAM aims to level the playing field for EU industries, it might cause market distortions and economic inequalities, such as increased compliance costs and shifts in production to countries better equipped for data provision.
This study highlights the need for adaptive regulatory strategies to support sustainable trade practices, aligning with global climate efforts by promoting environmentally conscious trade policies while mitigating unintended social, regulatory, and economic impacts.
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Faculteit der Managementwetenschappen