Q. With reference to the Carbon Border Adjustment Mechanism (CBAM), consider the following statements:
1.It is a policy proposed by the European Union that taxes products imported into the EU if they don’t meet its carbon emission standards.
2.All manufacturing sectors are currently covered under the CBAM.
3.Carbon leakage under the CBAM refers to the release of carbon during the transportation of goods.
Which of the statement(s) given above is/are correct?
Answer: B
Notes:
Explanations –
Statement 1 is correct. The CBAM is a policy introduced by the European Union to impose a tax on the carbon emissions embedded in certain imported goods. It ensures that imports are subject to the same carbon costs as domestic products under the EU’s Emissions Trading System (ETS).
Statements 2 and 3 are incorrect. CBAM currently applies only to specific carbon-intensive sectors such as cement, iron and steel, aluminium, fertilizers, electricity, and hydrogen. Carbon leakage refers to the situation where businesses move production to countries with less stringent climate policies, leading to an overall increase in global emissions.
Source: The Hindu
