DECARBONIZATION POLICY IN INTERNATIONAL TRADE: REGULATORY MECHANISMS AND BUSINESS OPPORTUNITIES
Abstract
This article examines decarbonization policy as a key driver of transformation in international trade under the conditions of global climate change. The study explores the economic nature and functional features of major regulatory mechanisms, including carbon pricing, emissions trading systems (ETS), carbon taxes, the Carbon Border Adjustment Mechanism (CBAM), environmental certification, and international climate agreements. The paper systematizes theoretical approaches to the interaction between environmental policy and international trade, with particular emphasis on the concepts of environmental competitiveness, transformational adaptation, and carbon budgeting. It provides a comprehensive analysis of carbon markets from both regional and sectoral perspectives, highlighting their role in shaping the emerging architecture of the global economy. Special attention is paid to the impact of decarbonization instruments on business competitiveness and global value chains. The study identifies key opportunities for businesses, such as access to green finance, expansion into environmentally sensitive markets, and the adoption of low-carbon technologies. At the same time, it outlines major challenges, including high investment costs, regulatory complexity, and unequal conditions for countries at different levels of development. The findings suggest that decarbonization policy is evolving into not only an environmental imperative but also a strategic economic instrument that redefines the rules of international trade. Adaptation to climate-related requirements is becoming a prerequisite for maintaining long-term competitiveness, particularly for transition economies such as Ukraine.
References
Aldy, J. E., & Pizer, W. A. (2022). Carbon pricing, climate policy, and international trade.
Bacchus, J. (2021). Trade and climate change: Aligning policies.
Brunel, C. (2023). Carbon pricing and international trade. Cambridge University Press.
California Air Resources Board. (2023). Cap-and-trade program. Available at: https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-program
Cosbey, A., & Mavroidis, P. C. (2021). Trade rules and climate change: Aligning policies. Global Policy, 12(S2), 16–27.
European Commission. (2020). EU ETS handbook.
European Commission. (2022). Fit for 55: Delivering the EU's 2030 climate target. Available at: https://ec.europa.eu/
European Commission. (2023a). Carbon Border Adjustment Mechanism (CBAM). Available at: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
European Commission. (2023b). CBAM implementation report.
Frankel, J. A. (2021). Environmental effects of international trade. Annual Review of Resource Economics, no. 13(1), pp. 1–26.
Helm, D. (2020). The carbon crunch: How we’re getting climate change wrong—and how to fix it. Yale University Press.
ICAP. (2024). Emissions trading worldwide: Status report 2024.
International Civil Aviation Organization. (2021). CORSIA implementation elements. Available at: https://www.icao.int/environmental-protection/CORSIA/
Kossoy, A., et al. (2015). State and trends of carbon pricing. World Bank.
Lanz, B., & Rutherford, T. F. (2023). Trade and climate policy: Tariffs, border adjustments, and leakage. Journal of Environmental Economics and Management, no. 115, 102705.
Mathews, J. A. (2017). Global green shift: When Ceres meets Gaia. Anthem Press.
Mehling, M. A., van Asselt, H., Das, K., & Droege, S. (2022). Border carbon adjustments in the EU: Legal and policy considerations. Review of European, Comparative & International Environmental Law, no. 31(1), pp. 1–14.
Nordhaus, W. D. (2021). The carbon economy and climate change. Yale University Press.
O’Brien, K., & Leichenko, R. (2019). Climate and society: Transforming the future. Cambridge University Press.
Pigou, A. C. (1920). The economics of welfare. Macmillan.
Porter, M. E., & van der Linde, C. (1995). Toward a new conception of the environment-competitiveness relationship. Journal of Economic Perspectives, no. 9(4), pp. 97–118.
Ricardo, D. (1817). On the principles of political economy and taxation. John Murray.
Rogelj, J., et al. (2019). Mitigation pathways compatible with 1.5°C. In Global warming of 1.5°C. IPCC.
Stern, N. (2021). Climate change and global trade policy. Cambridge University Press.
Taskforce on Scaling Voluntary Carbon Markets. (2022). Final report on voluntary carbon markets.
UNFCCC. (2015). Paris Agreement.
UA-Energy. (2023). Як CBAM вплине на український експорт. Available at: https://ua-energy.org/
World Bank. (2023). State and trends of carbon pricing 2023.
White House. (2021). Paris climate agreement rejoining statement. Available at: https://www.whitehouse.gov/
State Agency for Energy Efficiency. (2023). Monitoring of emissions in Ukraine and the CBAM. Available at: https://saee.gov.ua
Financial Times. (2023). EU reforms carbon market and launches CBAM. Available at: https://www.ft.com
Copyright (c) 2026 Н.П. Мешко, Ю.І. Присяжнюк
This work is licensed under a Creative Commons Attribution 4.0 International License.
