[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-109439-en":3,"doc-seo-109439-105":31,"detail-sidebar-cat-0-en-105":93},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},109439,5909877438554,"Maeve","https://ap-avatar.wpscdn.com/avatar/5600025385ad2bf12a7?_k=1778553567797529272",8,"Research & Report","The impact of the implementation of EU’s Carbon Border Adjustment Mechanism on North Macedonia - Policy Note","Policy note analyzing how the EU’s Carbon Border Adjustment Mechanism (CBAM) affects the economy of the Republic of North Macedonia, as requested by authorities in March 2024. The note explains the CBAM’s purpose to reduce carbon leakage by applying a carbon price to imports of selected goods, fully effective from 2026. Using the World Bank’s MINDSET model, the study projects export declines to the EU and a small overall economic output reduction of less than 0.3%, with larger vulnerabilities for aluminum and steel.","Public Disclosure Authorized Public Disclosure Authorized  \nThe impact of the implementation of EU’s Carbon Border Adjustment Mechanism on North Macedonia  \nPolicy Note  \nAcknowledgments  Executive Summary  1. Policy Context 2. Summary of the CBAM Regulation  3. The implications of the CBAM Regulation in North Macedonia  Appendix 1: Linkages and value-/supply-chain effects Appendix 2: The Methodology behind the MINDSET model   \nAcknowledgments  \nThis paper was prepared by a World Bank team led by Sanja Madzarevic Sujster (Senior Economist), and included Rozeta Karova, Joseph Dixon Callisto Pryor, Pavlina Zdraveva, Ulrike Lehr, Ira Dorband, Bence Kiss-Dobronyi and Hector Pollitt. This paper provides additional technical details on the findings of the North Macedonia Climate Public Finance Review published by the World Bank in May 2024. This note specifically focuses on explaining the impact of the application of the EU’s Carbon Border Adjustment Mechanism (CBAM) on the economy of the Republic of North Macedonia as requested by the authorities in March 2024.  \nThe work has been done with the financial support of the Austrian Government, through the Western Balkans Window of the Climate Support Facility.  \nExecutive Summary  \nThis note specifically focuses on explaining the impact of the application of the EU’s Carbon Border Adjustment Mechanism (CBAM) on the economy of the Republic of North Macedonia as requested by the authorities in March 2024. It builds on the detailed work delivered under the North Macedonia Climate Public Finance Review that simulates the results of the carbon tax introduction.  \nThe EU's CBAM is designed to address the risk of carbon leakage, which occurs when emissions reductionsin one jurisdiction are offset by increased emissions abroad. The CBAM aims to level the playing field between domestic firms and their competitors in other jurisdictions by imposing a carbon price on imports of certain goods from countries without comparable carbon pricing policies. It will be fully effective from 2026 and initially limited to few products. But this is only the first phase with further extension expected thereafter.  \nIn this first phase, the CBAM is expected to increase product prices in North Macedonia's cement, aluminum, iron, and steel industries. This is primarily because these sectors have higher Scope 1 emissions (direct emissions from production processes) than the EU average, and having in mind that the CBAM scope is limited to direct emissions for iron/steel, aluminum and hydrogen when it starts to apply in 2026. The higher emissions intensity necessitates the payment of CBAM fees on North Macedonia’s export products in these sectors to the EU. These are payments into the EU budget.  \nThe World Bank's MINDSET model, a demand-driven global macroeconomic model, was used to simulate the impacts of CBAM on North Macedonia. The model projects that the CBAM will lead to a decline in exports to the EU, particularly in the sectors mentioned above. However, the model also suggests that the overall impact on the economy will be relatively small, with a decline in economic output of less than 0.3 percent. This impact is primarily driven by reduced exports to EU in sectors like cement, iron and steel, aluminum, fertilizers, and electricity, due to the lack of carbon pricing in these sectors in North Macedonia.  \nWhile the overall impact on the economy is relatively small, certain sectors are more vulnerable than others. The aluminum and steel sectors are projected to experience losses close to 2 percent of their total output, while most other sectors see losses of around 0.5 percent or less. This is due to the higher Scope 1 emissions in these sectors compared to their EU counterparts, leading to higher CBAM fees for North Macedonia’s exports. The output loss could result in job losses in North Macedonia's manufacturing sector, particularly in the aluminum and steel industries. The model estimates that the CBAM cou","cbCaidgIXf48qs1E","https://ap.wps.com/l/cbCaidgIXf48qs1E","pdf",794960,5,1,19,"English","en",105,"# Acknowledgments\n# Executive Summary\n## Policy Context\n## Summary of the CBAM Regulation\n## Implications in North Macedonia\n# Appendix 1: Linkages and value-/supply-chain effects\n# Appendix 2: The Methodology behind the MINDSET model","[{\"question\":\"What is the main purpose of the EU’s Carbon Border Adjustment Mechanism (CBAM)?\",\"answer\":\"CBAM addresses carbon leakage by applying a carbon price to imports of certain goods from countries without comparable carbon-pricing policies, helping level the playing field between domestic firms and foreign competitors.\"},{\"question\":\"How does the CBAM affect North Macedonia’s economy according to the MINDSET model?\",\"answer\":\"The model indicates a decline in exports to the EU and an overall economic output reduction of less than 0.3%, driven by reduced exports in carbon-intensive sectors where North Macedonia lacks comparable carbon pricing.\"},{\"question\":\"Which sectors in North Macedonia are most vulnerable to CBAM and why?\",\"answer\":\"Aluminum and steel face losses close to 2% of total output, while many other sectors see losses around 0.5% or less, largely because these sectors have higher Scope 1 emissions than EU counterparts, leading to higher CBAM fees.\"}]","The impact of the implementation of EU’s Carbon Border Adjustment Mechanism on North Macedonia - 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