The Dual Effects of the EU Carbon Border Adjustment Mechanism on Environmental Quality in Exporting Enterprises' Locations Mechanisms, Case Studies, and Policy Implications

Abstract

The EU Carbon Border Adjustment Mechanism (CBAM), as the world's first carbon tariff rule, exerts complex and multifaceted impacts on export-oriented enterprises in developing countries and their local environmental quality. Based on theories of environmental regulation, carbon leakage, and international trade, this paper constructs a dual-effect theoretical framework for CBAM's influence on environmental quality, revealing its promoting and inhibiting effects on regional environmental quality through pathways such as "technology forcing" and "market relocation." Case studies of typical regions like Inner Mongolia and Guangdong, as well as industries such as steel and aluminum, demonstrate that in the short term, CBAM forces enterprises to upgrade technologies and adopt green electricity substitution, thereby reducing carbon emission intensity and improving air quality. However, in the long run, it may trigger the relocation of high-carbon industries to regions with laxer regulations, exacerbating global carbon leakage risks. Further research indicates that firm size, industry carbon intensity, and policy coordination are key factors moderating the environmental quality effects. Accordingly, this paper proposes differentiated governance strategies: enterprises should strengthen low-carbon technology R&D and supply chain management; governments should improve carbon pricing mechanisms and promote international mutual recognition of carbon standards; at the international level, the interests of developing countries must be balanced to prevent unilateral carbon barriers from worsening trade imbalances. This study provides theoretical foundations and policy references for developing countries to address CBAM challenges and achieve coordinated development of environment and trade.