Abstract:
The European Union Carbon Border Adjustment Mechanism will influence UK-EU trade, raising particular issues regarding Northern Ireland (NI). We analyse EU CBAM-related NI issues in four scenarios in terms of whether the UK and the EU link their Emission Trading Schemes (ETS) and whether the UK has an EU-style CBAM. Our research covers direct emissions and indirect emissions (i.e., electricity market), with its importance evidenced by economic data. Relinking the UK and EU ETSs and establishing an EU-style UK CBAM would be the best way to resolve the complications the CBAM creates for NI. The alternative of using the Stormont Brake to prevent the implementation of the EU CBAM in NI would be significantly less satisfactory.