As part of the European Green Deal, in 2023 the EU introduced the carbon border adjustment mechanism (CBAM), a climate instrument to prevent carbon leakage. On August 28, 2025, the Commission launched a call for evidence that aims to gather the opinions of all stakeholders, including academic institutions, on the rules on the methodology for calculating emissions embedded in CBAM goods, rules on the adjustment of CBAM certificates to reflect the EU ETS free allocation, and rules on the deduction of the carbon price paid in a third country.

Drawing on modeling and analysis for its recent flagship report, Building a Climate Coalition: Aligning Carbon Pricing, Trade, and Development, the Global Climate Policy Project at Harvard and MIT responded to the call for evidence and highlighted how the Commission could design the CBAM implementing act to better support economic development in poorer countries, while safeguarding EU competitiveness. GCPP’s analysis further indicated that a broader multilateral climate coalition could deliver more substantial climate and economic benefits—including for EU firms—suggesting that the Commission should implement the CBAM in a way that can either be expanded to include additional countries or made interoperable with an emerging multilateral coalition.