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Tuesday, June 02, 2026

How the EU’s carbon price on imports strengthens climate policies globally

Potsdam Institute for Climate Impact Research (PIK)

In early 2026, the EU extended its domestic carbon pricing to key products from beyond its borders. This is managed through the “Carbon Border Adjustment Mechanism” (CBAM). Exporters of polluting goods to the EU must pay a climate tariff, unless their country has its own pricing scheme. A study finds that this could incentivise EU trade partners to adopt carbon pricing as well. In particular Canada, Japan, Taiwan and South Korea are found to be likely candidates, leading to 73 percent more CO₂ emissions being avoided compared to when only the EU applies its climate policy.

The peer-reviewed study is already available on the website of the Journal of the Association of Environmental and Resource Economists (JAERE), and will appear in its November 2026 print edition. It was led by the Potsdam Institute for Climate Impact Research (PIK).

“The Carbon Border Adjustment Mechanism is intended to enable the EU industry to decarbonise while remaining competitive – but what happens outside of the EU is not less significant,” explains PIK researcher Timothé Beaufils, the study’s lead author. “We already observe other countries like Brazil or Turkey responding to the CBAM with their own carbon price. We developed a novel framework to estimate this policy diffusion effect. It provides a strong indication that the EU Green Deal has indeed the potential to trigger the reinforcement of climate policies in other countries.”

The study is based on a specially developed economic model that combines two strands of research: trade economics and game theory. Based on their economic interest, trading partners choose between paying the climate tariff into the EU coffers – or implementing their own carbon price and thus joining what the study calls a “climate coalition”. Detailed trade simulations are used to inform these decisions, which depend on the carbon price level, the exact design of the CBAM – and the countries already part of the coalition.

The CBAM carbon pricing on imports currently applies to steel, iron, aluminium, cement, fertilisers, electricity and hydrogen. To assess its incentive effect on international climate cooperation, the research team feeds its calculation tool with empirical data on trade flows for 56 economic sectors and 43 countries. Using these figures, the team models the EU’s climate policy based on a carbon price of 100 dollars per tonne. The model analysis shows some striking ripple effects:

Without border adjustment, the European carbon price results in a reduction in domestic European emissions of 505 million tonnes of CO₂ per year. Outside the EU, however, emissions increase such that global emissions are only 305 million tonnes lower. This is because other countries move to supply the more energy-intensive products and, moreover, benefit from lower world market prices due to Europe’s phase-out of fossil fuels. EU climate protection therefore has a massive leak – known as “carbon leakage” – offsetting 40 percent of Europe’s emission reduction.

With the border adjustment, the carbon leakage effect is much smaller, only 15 percent instead of 40 percent before, resulting in as much as 399 million tonnes of CO₂ emissions reduced globally.

With a policy response from trading partners, the global reduction in emissions is 691 million tonnes, a further 73 percent over and above the impact of the EU climate policy alone. Four countries – Canada, Japan, South Korea and Taiwan – avoid the additional burden of CBAM by implementing their own carbon pricing, thereby joining the climate coalition.

Additional model runs show that extensions of the CBAM to other sectors could make it beneficial for more countries to join the climate coalition, including the US. By contrast, China would currently only participate if the carbon price were below 20 dollars per tonne. While the exact quantitative findings of the study depend on specific model assumptions, the main finding that the EU CBAM triggers the adoption of carbon pricing holds under a broad range of modelling assumptions.

“Our findings support and quantify the hypothesis that the EU CBAM can trigger a so-called Brussels effect,” summarises Leonie Wenz, PIK researcher and a co-author of the study. “What this means is that, due to the EU’s central position in international supply chains, policies adopted in Brussels spill over to outside the EU. Greater climate action leads to even greater climate action. This can play an important role in climate mitigation, especially if international negotiations on climate mitigation stall.”

Journal

Journal of the Association of Environmental and Resource Economists

DOI

10.1086/742163

Method of Research

Computational simulation/modeling

Subject of Research

Not applicable

Article Title

The Potential of carbon border adjustments to foster climate cooperation

Article Publication Date

1-Jun-2026

ICYMI

Student astronomer discovers ‘Rosetta stone’ for mysterious cosmic signals

White dwarf binary provides unique natural laboratory for extreme physics

University of Sydney

Accreting white dwarf binary — image:
Artists’ impression of the white dwarf binary ASKAP J1745-5051. The smaller, dense white dwarf star is accreting material from the larger, but less dense red dwarf star. The interaction of their magnetic fields and the heat from the material accretion creates signals in radio and X-ray light frequencies.
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Credit: Credit: Carl Knox (OzGrav/Swinburne) and Dr Joshua Preston Pritchard (CSIRO).

An international team led by astronomers at the University of Sydney has uncovered the clearest evidence yet for the origin of an unusual class of cosmic signals. In doing so, they have identified a rare stellar system that is providing scientists with a natural laboratory to study extreme physics.

Using CSIRO’s ASKAP radio telescope, the team discovered a small, dense star, called a white dwarf, shredding material from its larger, but less dense, companion star.

As this material spirals in, it produces powerful bursts of radio waves and X-rays in a cycle that repeats every 1.4 hours.

The findings are published in Nature Astronomy.

Lead author and PhD student Kovi Rose from the University of Sydney’s School of Physics and CSIRO said this provides the first confirmed identification of a what astronomers call ‘long-period radio transients’: cosmic pulses discovered from just a few remote regions of our galaxy.

“For the first time we have pinpointed the origin of these signals, confirming the source to be a ‘cataclysmic variable’, or an accreting white dwarf star,” said Mr Rose.

“Long-period radio transients have puzzled astronomers for years,” Mr Rose said. “We’ve only found about a dozen, and their origins have been unclear. Now, we’ve been able to show that the source for one of these transients comes from a white dwarf actively pulling material from a companion star.”

A rare and revealing system

The newly identified system, named ASKAP J1745−5051, consists of a white dwarf – a dense stellar remnant roughly the size of Earth but with the mass close to that of the Sun – paired with a larger but lower-mass red dwarf star of about one-tenth the Sun’s mass. The two stars orbit each other extremely closely, completing a full orbit in just over an hour.

As material from the less massive star is drawn towards the white dwarf, it heats up and emits X-rays. At the same time, interactions between the stars’ magnetic fields generate regular radio bursts, meaning the signal occurs at specific intervals.

“These emissions are all tied to the orbital motion of the system,” Mr Rose said. “But interestingly, the radio and X-ray signals don’t peak at the same time, which tells us they’re being produced in different regions of the system.”

The team found that the radio emission likely originates where the magnetic fields of the two stars meet and interact with the charged material being ripped from the companion star, producing tightly beamed bursts of radiation.

Solving a cosmic mystery

Long-period radio transients were initially thought to be slow-spinning neutron stars, known as pulsars. However, current models suggest neutron stars rotating this slowly should not be able to produce such signals.

The new discovery strengthens an alternative explanation: that at least some of these mysterious bursts come from systems of two stars, involving white dwarfs.

“Some similar objects had been linked to binary systems before, but this is the first one where we can clearly see both stars and the accretion process in action,” said Professor Murphy, Head of School at the University of Sydney School of Physics and Chief Investigator at the ARC Centre of Excellence for Gravitational Wave Discovery (OzGrav).

The system is also only the second known long-period radio transient to emit regular X-rays – and the first where the cause of the regularity has been confirmed.

A ‘Rosetta stone’ for future discoveries

This unique system was discovered using the ASKAP radio telescope, owned and operated by CSIRO, Australia's national science agency. ASKAP’s mix of coverage, resolution, and sensitivity is unparalleled in radio astronomy, allowing for such unusual signals to be detected that would otherwise be missed.

The researchers say that ASKAP J1745-5051 could act as a reference point for understanding other long-period radio transients.

“This system gives us a way to decode these signals. It could help us determine whether other long-period transients are more like pulsars or like white dwarf systems, acting like a stellar Rosetta stone,” said Mr Rose, referring to the archaeological object discovered in Egypt that helped translate ancient hieroglyphics.

The discovery also provides a unique opportunity to study extreme plasma physics and magnetic interactions under conditions that cannot be replicated on Earth.

“These systems are natural laboratories,” Mr Rose said. “They allow us to test our understanding of how matter behaves in strong magnetic fields and under intense gravitational forces.”

Future research

The team plans further observations combining radio, optical and X-ray telescopes to better understand how these emissions are generated and whether similar mechanisms can explain the full population of long-period radio transients.

“Each new discovery is helping us piece together the bigger picture,” Mr Rose said. “We’re only just beginning to understand this new class of cosmic events.”

The international team included astronomers from the United States, China, Canada, Spain, Israel and Australia. The team used CSIRO’s Australia Telescope Compact Array and ASKAP radio telescopes in Australia, the MeerKAT radio telescope in South Africa, the SOAR and Magellan optical telescopes in Chile, and the space-based Swift (UV/X-ray) and Einstein Probe (X-ray) telescopes.

DOWNLOAD photos, animations, illustrations and the research paper at this link.

RESEARCH

Rose, K. et al ‘Periodic radio and X-ray emission from an accreting white dwarf binary’ (Nature Astronomy 2026). DOI: 10.1038/s41550-026-02882-x

DECLARATION

The authors declare no competing interests. Research was funded by the Australian Research Council Centre of Excellence for Gravitational Wave Discovery (OzGrav), NASA, the Alfred P. Sloan Foundation, the Professor Harry Messel Research Fellowship in Physics Endowment, European Research Council and the China Scholarship Council.

Milky Way above the CSIRO ASKAP radio telescope — Lead author Kovi Rose from the School of Physics at the University of Sydney, stands in front of an image visualisation of the white dwarf binary ASKAP J1745-5051. Photo: Dr Kirsten Banks (OzGrav).
Credit
Photo: Dr Kirsten Banks (OzGrav). Visual: Carl Knox (OzGrav)

The ASKAP radio telescope at Inyarrimanha Ilgari Bundara, the CSIRO Murchison Radio-astronomy Observatory on Wajarri Yamaji Country in Western Australia.

Credit
Credit: Alex Cherney/CSIRO