Comparative Analysis of the Impact of the EU Carbon Border Adjustment Mechanism on the Foreign Trade of Developed and Developing Countries (the Examples of the USA and Indonesia)

The study provides a comparative analysis of the impact of Carbon Border Adjustment Mechanism of the European Union (EU CBAM) on the export flows of developed and developing countries to the EU using the example of the USA and Indonesia. Based on the indicators of the export significance index, its commodity structure, as well as actual and global average carbon intensity indicators by industry, we came to the conclusion that the introduction of the EU CBAM would entail higher costs for exporters from Indonesia than from the United States. At the same time, due to the greater orientation of export flows to the EU, the share of export costs associated with the EU CBAM from total exports from the United States will be higher than that of Indonesia. Based on the historical dynamics of exports, the amount of carbon emissions and the share of goods in total exports, the industries most vulnerable to the EU CBAM were identified for both countries. At the same time, regression analysis showed that decarbonization of industry with a greater focus on the European Union will lead to a greater increase in exports of carbon-intensive goods from Indonesia to EU than from the United States, however, given the level of access to green technologies and the degree of development of relevant national legislation, it will be more difficult for Indonesia to make progress in reducing carbon emissions than the United States. In addition, based on the analysis of existing and planned climate initiatives of both countries, possible ways of their adaptation to the EU CBAM were proposed.