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Paper short abstract

Carbon pricing and Border Carbon Adjustments may reshape global climate governance, but they also raise ethical questions about who bears the costs. This study, therefore, examines fairness and distributive justice among firms in South Africa and Nigeria, with a focus on hard-to-abate sectors.

Paper long abstract

The global expansion of carbon pricing instruments and Border Carbon Adjustments (BCAs) is reshaping climate governance, yet their ethical implications for firms in developing and middle-income economies remain insufficiently understood. While these mechanisms aim to internalise carbon externalities and curb carbon leakage, they may impose uneven compliance costs on firms with differing technological, financial, and institutional capacities. We therefore examine who bears the burden of “carbon fairness” within the emerging architecture of global carbon governance.

We analyse how BCAs and domestic carbon pricing regimes affect firms operating in hard-to-abate sectors, including steel, cement, oil and gas, and power generation. Primary data are collected through structured surveys and semi-structured interviews with firms, policymakers, and industry associations, capturing perceptions of regulatory fairness, competitiveness, and compliance burdens, as well as the adoption of AI-based tools for emissions monitoring and reporting.

We address three core questions: whether carbon pricing and BCAs distribute mitigation costs equitably across firms; how AI-enabled compliance technologies shape inclusion, transparency, and ethical participation; and whether global carbon governance mechanisms risk reinforcing structural disadvantages for firms in African economies. By grounding ethical debates in firm-level evidence, the research generates new insights into the distributive and moral dimensions of carbon regulation.