Chapter 10 focuses on the EU’s Carbon Border Adjustment Mechanism (CBAM), introducing carbon pricing on imported products from certain sectors, in an attempt to address carbon leakage and, intentionally or not, ensuring a level playing field between domestic and imported products. The chapter presents the mechanism, its aims, and its consistency with EU’s international environmental and trade commitments. Accordingly, the chapter analyses the question of CBAM’s compatibility with the international principle of common but differentiated responsibility (CBDR) as it treats developing and least developed countries on an equal footing with the developed ones. Then it considers the question of the mechanism’s compliance with WTO rules, in particular WTO non-discrimination rules and prohibition on quantitative restrictions. It pays special attention to potential justifications of possible breaches and whether they could accommodate also a CBAM in line with the CBDR principle, thereby addressing the convoluted question of the relationship between international trade and climate regimes.

This chapter examines Sweden’s emissions trends and the evolution of climate policy in an international perspective by focusing on its role and interdependent relationship with climate action in the EU and with international climate coalitions. The chapter examines the assumption that Sweden is a front-runner and role model in setting and implementing ambitious climate policy. The emission trends across sectors suggest that Sweden has been able to swiftly reduce its emissions, in particular from industry and energy conversion, but that current reduction rates are insufficient to reach its decarbonization target. Reducing emissions in agriculture and transport poses perhaps the greatest challenges for the Swedish state. The chapter also discusses the limits and possibilities for the State to implement its decarbonization target while being dependent on the climate policies in the EU, notably the Emission Trading Scheme (ETS). It also looks at Sweden’s role in international climate governance by zooming in on its role in international climate collaborations and clubs. Finally, the chapter provides three reasons for caution when it comes to Sweden’s reputation as a role model. First, that the rate of GHG reduction has declined significantly. Second, that consumption-based approaches to counting GHG emissions demonstrates that Sweden remains a high-emitting country. Third, that Sweden’s consumption-levels are far above the global average and its current consumption patterns should not be emulated by other countries.

This chapter explores the European Union Emissions Trading System (EU ETS) and explains how the transition to a blockchain-based trading system could be operationalised. It also provides a legislative roadmap for aligning the EU ETS with the European Union Digital Strategy.