Selected Issues Papers Volume 2026 Issue 078: The Impact of the EU CBAM and Carbon Pricing in Bosnia and Herzegovina (2026)

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The Impact of the EU CBAM and Carbon Pricing in Bosnia and Herzegovina

Author:

Alpa Shah

Alpa Shah
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Daniel Bastidas

Daniel Bastidas
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Nate Vernon-Lin

Nate Vernon-Lin
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, and

Karlygash Zhunussova

Karlygash Zhunussova
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Series:: Selected Issues Papers

Volume/Issue:: Volume 2026: Issue 078

Language:: English

Publication Date:: 07 Aug 2026

DOI:: https://doi.org/10.5089/9798229056588.018

ISBN:: 9798229056588

ISSN:: 2958-7875

Pages:: 37

Keywords:: Carbon Border Adjustment Mechanism; CBAM; Carbon Pricing; Carbon Tax; Emissions Trading System; Bosnia and Herzegovina; Climate Policy; Trade Competitiveness; Decarbonization; EU Cbam; Cbam product; IMF country; issues paper; European Union's Carbon Border Adjustment Mechanism; Electricity; Exports; Non-renewable resources; Global

Legal-disclaimer:: IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed.

Series:: Selected Issues Papers

Volume/Issue:: Volume 2026: Issue 078

Language:: English

Publication Date:: 07 Aug 2026

DOI:: https://doi.org/10.5089/9798229056588.018

ISBN:: 9798229056588

ISSN:: 2958-7875

Pages:: 37

Keywords:: Carbon Border Adjustment Mechanism; CBAM; Carbon Pricing; Carbon Tax; Emissions Trading System; Bosnia and Herzegovina; Climate Policy; Trade Competitiveness; Decarbonization; EU Cbam; Cbam product; IMF country; issues paper; European Union's Carbon Border Adjustment Mechanism; Electricity; Exports; Non-renewable resources; Global

Legal-disclaimer:: IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed.

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This paper assesses the macroeconomic implications of the European Union’s Carbon Border Adjustment Mechanism (CBAM) on Bosnia and Herzegovina and examines policy options to mitigate its effects. It finds that CBAM will affect key export sectors, including aluminium, cement, electricity, and iron and steel, and is estimated to have a significant negative GDP impact in the absence of a domestic policy response. The paper then evaluates alternative policy responses and finds that domestic carbon pricing can help to retain revenues, reduce emissions, and partially offset the macroeconomic costs of CBAM when combined with well-designed revenue recycling measures.

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Selected Issues Papers

Publisher:: International Monetary Fund

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