Climate clubs and carbon border adjustments: a review

Nobel Memorial Prize winner William Nordhaus and others have proposed a climate club as the ultimate climate-mitigation measure. Meanwhile, the European Union (EU) is pressing on with the creation of a carbon border adjustment mechanism (CBAM) that would put pressure on the rest of the world to introduce the same level of carbon pricing as the EU. There are strong linkages between the concepts of a climate club and CBAM. However, the EU long studiously avoided referring to a climate club in its official communication, and the relationship between the two concepts remains unclear. This study seeks to clarify the relationship through a systematic review of the climate club and carbon border adjustment literatures to highlight synergies and contradictions, reduce fragmentation, and increase actionability. A tailored Boolean search string is used to extract relevant literature, which is then categorised along eight parameters. The VOSviewer network analysis and visualisation software is used to examine cross-citations and bibliographic coupling. The review finds that there are connections between the objectives, methods and concerns of the two branches of literature but that there are divergences in terms of conceptual roots, disciplinary frames and the views that authors take of CBAM/a climate club. Only 7% of the studies relate to international relations theory. Several large emitters, geopolitically important states and developing countries are ignored by the literature. Although the cooperation/resistance of Asian countries will be decisive for the fate of any climate club initiative, only 15% of authors are based in Asia and Western scholars dominate the field. A five-pronged research agenda is proposed to address the identified gaps: enhanced interaction between the fields of research, coverage of a broader range of countries, additional analysis by Asia-based researchers, more contributions from political science and international relations scholars and further work on how to calculate tariffs.