With reference to the Carbon Border Adjustment Mechanism (CBAM) consider the following statements:1.Under the CBAM, imports of certain carbon-intensive products like cement, iron and steel, electricity will have to bear the same economic costs borne by EU producers under the Emissions Trading System (ETS). 2.A reduction in the carbon pricing cannot be claimed even when a carbon price has been paid for the imported products in their country of origin.Select the correct answer from the code given below:

Q. With reference to the Carbon Border Adjustment Mechanism (CBAM) consider the following statements:
1.Under the CBAM, imports of certain carbon-intensive products like cement, iron and steel, electricity will have to bear the same economic costs borne by EU producers under the Emissions Trading System (ETS).
2.A reduction in the carbon pricing cannot be claimed even when a carbon price has been paid for the imported products in their country of origin..
Select the correct answer from the code given below:

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A

Notes:

Explanation –

Statement 1 is correct. Under the CBAM, imports of certain carbon-intensive products like cement, iron and steel, electricity will have to bear the same economic costs borne by EU producers under the Emissions Trading System (ETS).

Statement 2 is incorrect. When a carbon price has been paid for the imported products in their country of origin, a reduction can be claimed.

Source: ForumIAS

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS