Having a CBAM does discourage “outsourcing greenhouse gas emissions” by buying “carbon intensive products" like steel, aluminum, cement and other products with high levels of ”embodied carbon" from countries with no carbon price. The CBAM is easy to enforce on imports of physical products that already are subject to the Harmonized Tariff system at their port of entry.
But what about carbon embodied in intangible products and services, like AI, crypto mining and other data-center-intensive computing? I don't see any practical way of corralling those for any kind of CBAM. This could become a significant part of “GHG leakage” as the price on carbon moves higher in Europe, Canada and, hopefully, the US. I don't see a solution … or even a path to a solution. Do you?
Microsoft to Boost Mexico’s AI Infrastructure with $1.3B Investment
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