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- October 8, 2026
- Economics
Do Carbon Border Taxes Induce Reshoring? Early Evidence from the EU CBAM
Date: 2026-10-14
Time: 4:30 PM - 5:50 PM
Venue: 90402 International Hall
Speaker: Prof. Weikai Li (City University of Hong Kong)
The EU Carbon Border Adjustment Mechanism (CBAM) imposes a carbon price on imports to level the playing field between EU and non-EU (NEU) suppliers and curb carbon leakage. Using FactSet Revere supply-chain data and a difference-in-differences design, we examine how CBAM reshapes global supply chains. Affected EU importers do not reshore toward EU suppliers; instead, they reduce new EU supplier formation by 7.3 percentage points and increase NEU supplier formation by 9.1 percentage points. EU importers tilt toward cleaner NEU suppliers with lower carbon intensity and those located in higher-carbon-price countries. These adjustments are concentrated in low-storage-difficulty sectors, and the reshoring failure is concentrated among high-energy-price EU suppliers. CBAM mitigates carbon leakage through supplier sorting rather than reshoring.
Time: 4:30 PM - 5:50 PM
Venue: 90402 International Hall
Speaker: Prof. Weikai Li (City University of Hong Kong)
The EU Carbon Border Adjustment Mechanism (CBAM) imposes a carbon price on imports to level the playing field between EU and non-EU (NEU) suppliers and curb carbon leakage. Using FactSet Revere supply-chain data and a difference-in-differences design, we examine how CBAM reshapes global supply chains. Affected EU importers do not reshore toward EU suppliers; instead, they reduce new EU supplier formation by 7.3 percentage points and increase NEU supplier formation by 9.1 percentage points. EU importers tilt toward cleaner NEU suppliers with lower carbon intensity and those located in higher-carbon-price countries. These adjustments are concentrated in low-storage-difficulty sectors, and the reshoring failure is concentrated among high-energy-price EU suppliers. CBAM mitigates carbon leakage through supplier sorting rather than reshoring.