Carbon Border Adjustment and Trade Vulnerability in Developing Countries

This paper examines the long-term evolution of Carbon Border Adjustment (CBA) Vulnerability Index scores across five CBAM-exposed economies—India, Brazil, South Africa, Indonesia, and Turkey, from 1980 to 2024. By integrating the dimensions of exposure, sensitivity, and adaptive capacity, this study assesses each country’s changing susceptibility to climate-aligned trade measures. The findings reveal a significant increase in vulnerability during the 1990s and 2000s, coinciding with intensified globalization and rising environmental standards these economies. While the index approach allows comparative insights, it is limited by data quality and lack of sectoral granularity. Nonetheless, the study underscores the urgency for developing countries to invest in decarbonization, institutional strengthening, and fiscal innovation to stay competitive in a carbon-constrained global trade environment.