World leaders are meeting these two weeks at the 25th Conference of the Parties to the UNFCCC (COP25) in Madrid to discuss, once again, how they will step up their national climate commitments (‘nationally determined contributions, or NDCs’) by 2020. Commentators see very few signs that a breakthrough will be reached at this COP, especially since major emitters such as the USA or China have not expressed any intentions of enhancing their NDCs.

At the same time, the EU is discussing the adoption of a mid-century climate neutrality target after the new European Commission president Ursula von der Leyen made a pledge for concluding a New Green Deal for Europe during her first 100 days in office. Her proposal includes 50 measures, among which are the reform of the EU’s emissions trading system and an overhaul of the EU’s energy tax directive as well as the introduction of a Carbon Border Tax. The latter has provoked a lot of scepticism of experts and EU officials alike.

In a short series, I will take a closer look at

• what a carbon border tax is
• what its potentials?
• what its drawbacks?
• how could be the policy be designed?