The European Commission has introduced a new tool to address the climate emergency and reduce greenhouse gas emissions through the ‘Fit for 55’ package. This instrument is the “Carbon Border Adjustment Mechanism” (CBAM) and allows for addressing the problem of carbon leakage.
The CBAM requires European importers to buy greenhouse gas emission allowances equal to the amount of CO2 emitted in the product’s production process, at a Price equal to that set by the European Emission Trading System. By its nature, the CBAM protects the competitiveness of European companies in the steel and iron, aluminum, fertilizer, cement, electricity, and hydrogen sectors.
The objective of this thesis is to analyze the risks in terms of exposure and vulnerability of countries in the East Asia and Pacific region, which include two of the ten largest economies in the world and some of the countries most harmed by climate change.
Through the creation of a risk index based on six sub-dimensions of exposure and vulnerability, this study allows for the calculation of the risk associated with each of the countries in the East Asia and Pacific region following the introduction of CBAM and provides guidance to policymakers in these countries as to which economic, administrative, and environmental sectors urgently need to be acted upon in time.