Climate and Trade: Unlocking Solutions through International Trade

The Carbon Border Adjustment Mechanism (CBAM) is a policy tool introduced by the European Union (EU) to address carbon leakage and ensure that climate policies do not disadvantage European industries in the global market. By imposing a carbon price on imports of certain goods, CBAM aims to create a level playing field between domestic and foreign producers and incentivize global reductions in greenhouse gas emissions. This policy brief explores the CBAM in detail, its potential implications for the African continent, and its specific impact on Lesotho.