Impact of Carbon Border Adjustment Mechanisms (CBAMS) on the Export Competitiveness of Developing Nations

Purpose: The purpose of this article was to analyze impact of carbon border adjustment mechanisms (CBAMs) on the export competitiveness of developing nations. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Carbon border adjustment mechanisms (CBAMs) pose a significant risk to the export competitiveness of developing nations. Their carbon-intensive exports, such as steel, aluminum, and fertilizers, face higher costs and administrative burdens when entering markets like the EU, making them less competitive. This can lead to export revenue losses and hinder industrial development. Consequently, these nations face urgent pressure to decarbonize their industries to maintain market access, a transition that requires significant financial and technological investment. Unique Contribution to Theory, Practice and Policy: Pollution haven hypothesis, theory of ecological unequal exchange & porter hypothesis may be used to anchor future studies on the impact of carbon border adjustment mechanisms (CBAMs) on the export competitiveness of developing nations. For practical implementation, it is recommended that industry associations in vulnerable sectors, such as steel, aluminum, and fertilizers, establish Sector-Wide Carbon Accounting Hubs. At the policy level, governments must pursue a dual-track strategy of negotiation and domestic transformation.