The potential impact of EU’s carbon border adjustment mechanism (CBAM): an Australia-China relationship perspective

Abstract

Purpose This paper aims to investigate the multifaced aspects and consequences of the EU Carbon Border Adjustment Mechanism (CBAM) from an Australia-China Relationship perspective. Design/methodology/approach This paper leverages the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to examine both the internal and external factors that affect Australia and China in the context of the CBAM. In addition, we employ the PEST (Political, Economic, Social and Technological) framework to identify effective strategies for Australia-China cooperation following the implementation of the CBAM. Findings Our analysis reveals numerous mutual interests and opportunities for bilateral collaboration, despite challenges and threats, positioning the CBAM as a potentially significant catalyst for joint initiatives. Practical implications This paper proposes 10 potential areas for Australia and China cooperation from the political economic social and technological PEST dimensions. Originality/value This paper makes a pioneering attempt to explore potential strategies, both individually, and together, that Australia and China can adopt to manage the impact and consequence of CBAM.