Economic implications of the Carbon Border Adjustment Mechanism (CBAM) for South Africa and Mozambique

Maksym Chepeliev and Dominique van der Mensbrugghe

No wp-2026-68, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper evaluates the economic impacts of the European Union (EU) and United Kingdom (UK) Carbon Border Adjustment Mechanism (CBAM) on Mozambique and South Africa—two countries with high exposure due to carbon intensive exports. Using the Global Trade Analysis Project Circular Economy (GTAP-CE) Data Base and the dynamic computable general equilibrium (CGE) model ENVISAGE, we develop a baseline to 2035 and simulate the proposed CBAM. Results show modest macroeconomic effects but significant sectoral adjustments.

Keywords: Climate change; Carbon emission intensity; Mitigation policy; Computable general equilibrium (search for similar items in EconPapers)
Date: 2026
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