The article “From Coal to CBAM: Assessing Vulnerability in the Western Balkans’ Transition to the EU Green Economy” by Leona Knežević Mužić and Ana Vučemilović-Grgić, research assistants at IRMO’s Department for International Economic and Political Relations, has been published in the latest issue of Economic Development, a journal of the Institute of Economics at Ss. Cyril and Methodius University.
The paper explores the macroeconomic and social implications of the European Union’s Carbon Border Adjustment Mechanism (CBAM) for the Western Balkan countries. Using a partial equilibrium model to assess sectoral exposure, the authors estimate potential CBAM-related costs in key industries. The analysis identifies areas of high vulnerability where CBAM-induced costs could undermine export competitiveness, threaten fiscal stability, and increase the risk of job displacement in carbon-intensive sectors. The authors argue that policies aimed at preventing carbon leakage within the EU may unintentionally constrain industrial modernisation and economic convergence in neighbouring economies. The paper concludes that, without transitional financial and technical support, CBAM could act as a de facto trade barrier and slow the Western Balkans’ progress toward EU accession.
