A Sustainable Investment in Journalism

A sustainable business requires diverse revenue streams. ESG Investor now operates a subscription service as of Tuesday 14th May. To find out more please get in touch with our subscription team on subscriptions@esginvestor.net

Climate Clubs Recommended as CBAM Alternative

So-called climate clubs could be more successful in extending the reach of carbon pricing than schemes that tax CO2-intensive imports, such as the EU Carbon Border Adjustment Mechanism (CBAM). This argument has been made by Kaya Advisory, a specialist climate consultancy, in a paper commissioned by the Inevitable Policy Response (IPR) and published by the Principles for Responsible Investment (PRI). The report suggests that carbon pricing’s use as a tool by policymakers will continue to grow, and although a form of CBAM is currently under negation in the EU Parliament and Council,significant hurdles” would need to be overcome for it to be successful. The report suggests climate clubs may be a better solution to evolve global carbon pricing, highlighting their flexibility, inclusivity and potential to accelerating the role of carbon pricing in the transition, as well as their being more politically feasible. Noting how the concept of ‘friendshoring’ has developed in response to the need to realign supply chains in response to geopolitical risks, the paper says trading agreements between like-minded nations may include common approaches to carbon pricing. “Embedding carbon-aligned policies can and likely will become a weapon (of sorts) which incentivises alignments that also achieve domestic national policies, up to and including protectionism for industry.” 


The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top