Maliszewska, M.Fischer, C.Jung, E.Chepeliev, M.2025-08-192025-08-192025-08-19https://hdl.handle.net/10986/43614The EU Carbon Border Adjustment Mechanism (CBAM) aims to level the playing field by applying the same carbon price faced by domestic producers under the Emission Trading System to the emissions embodied in certain imported goods. Differences in emissions intensity between EU and developing-economy producers will then influence the competitiveness of firms in developing economies exporting aluminum, cement, electricity, fertilizer, iron and steel, and hydrogen to the EU. Indicators are developed to assess the potential exposure of developing economies to the CBAM, using measures of excess carbon payments relative to EU producers expressed as shares of total exports, gross sectoral output, and GDP. Although macroeconomic impacts are expected to be small, some countries (like Mozambique in aluminum and Egypt in fertilizer) could see economically meaningful reductions in competitiveness in the EU market. A few countries with relatively low emission intensity of production may stand to gain market share.en-USCC BY-NC 3.0 IGOCLIMATE ACTIONEU CARBON BORDER ADJUSTMENT MECHANISM (CBAM)EMISSION TRADING SYSTEMCARBON PRICEWorking PaperWorld Bankhttps://doi.org/10.1596/43614