In this episode of The Sound of Economics, host Rebecca Christie sits down with Bruegel’s Ignacio García Bercero and Ben McWilliams to talk about the evolution of the European Union’s carbon border adjustment mechanism, known as CBAM. When will companies start paying? Which countries and sectors will be hit the hardest? And how will cross-border carbon levies work for electricity markets, given how hard it is to trace emissions to electrons? We discuss what it means to crack down on carbon leakage and how the EU can make the most of its new tools going forward.Relevant Research: CBAM and carbon pricing: forging fair paths to climate stability, Bruegel Event, 22 May 2024 McWilliams, B. R. Stubbe and G. Zachmann (2025) 'The case for delaying the application of the EU’s carbon border levy to electricity', Analysis, 19 November, Bruegel, available at https://doi.org/10.64153/ZFMB9781 Zachmann, G. and McWilliams, B. (2020) 'A European carbon border tax: much pain, little gain', Policy Contribution 05/2020, Bruegel, available at https://www.bruegel.org/policy-brief/european-carbon-border-tax-much-pain-little-gain

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