Published on: 2025-09-11 at 00:00:02
Topic: Subsidies & CBAM and Resilience Planning
"Subsidies & CBAM and Resilience Planning" centers on the interplay between government financial support, the Carbon Border Adjustment Mechanism (CBAM), and strategies to enhance economic and environmental resilience. Subsidies are government incentives aimed at promoting certain industries or technologies, often used to support clean energy and sustainable practices. However, such subsidies can distort markets and lead to carbon leakage, where production shifts to regions with laxer climate policies.
The CBAM is an EU policy tool designed to level the playing field by imposing carbon costs on imported goods equivalent to those faced by domestic producers under the EU Emissions Trading System. This mechanism discourages carbon leakage and incentivizes cleaner production globally.
Resilience planning involves preparing economies and industries to withstand environmental, economic, and policy shocks, including those arising from climate change and regulatory changes like CBAM. Integrating subsidies with CBAM and resilience planning requires careful coordination to avoid unintended consequences, ensure fair competition, and promote sustainable transitions. Policymakers must balance support for domestic industries with incentives for global decarbonization while fostering adaptive capacities that sustain long-term environmental and economic health.