{"id":249155,"date":"2023-06-22T20:36:27","date_gmt":"2023-06-22T15:06:27","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=249155"},"modified":"2023-08-31T16:36:14","modified_gmt":"2023-08-31T11:06:14","slug":"why-eus-carbon-levy-helps-rich-countries-get-richer","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-eus-carbon-levy-helps-rich-countries-get-richer\/","title":{"rendered":"Why EU\u2019s carbon levy helps rich countries get richer"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cWhy EU\u2019s carbon levy helps rich countries get richer\u201d <\/strong>published in \u201cThe Indian Express\u201d <\/strong>on 22nd June 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Environment<\/p>\n

Relevance- <\/strong>Issues related to climate change<\/p>\n

News<\/strong>– EU has introduced a Carbon Border Adjustment Mechanism (CBAM).<\/strong><\/p>\n

What is the issue of differentiated responsibility sharing in climate change negotiations?<\/strong><\/h2>\n

Historically, the primary responsibility<\/strong> for climate change has been with the advanced economies, and their process of industrialisation<\/strong>.<\/p>\n

The contribution of the Global South<\/strong> was negligible. The Kyoto Protocol recognised the \u201ccommon but differentiated responsibilities\u201d<\/strong>.<\/p>\n

The Paris Agreemen<\/strong>t required the richer countries to make financial transfers<\/strong> to the developing economies. It set a floor of $100 billion per year<\/strong> for these transfers.<\/p>\n

What are some facts about CBAM?<\/strong><\/h2>\n

This involves imposing tariffs on imports from other countries that use carbon-intensive methods of production. <\/strong><\/p>\n

A tariff on the import of these goods by the EU would restore competitive parity<\/strong> to the domestically produced goods that are subject to a higher price of carbon.<\/p>\n

The CBAM is expected to achieve three objectives<\/strong>. First <\/strong>is to reduce the EU’s emissions<\/strong>. Second<\/strong> is that the EU should not lose competitiveness in carbon-intensive goods<\/strong>. Third<\/strong> is to make the targeted countries reduce the carbon intensity of their exports.<\/strong><\/p>\n

This mechanism, starting in 2026<\/strong>, will cover products such as cement, steel, aluminium, oil refinery, paper, glass, chemicals and electricity generation.<\/p>\n

The countries most affected<\/strong> will be Russia, Ukraine<\/a>, Turkey, India and China. Only three of the 12 exporters to the EU have a mechanism for \u201cpricing carbon\u201d<\/strong>.<\/p>\n

What are issues related to CBAM?<\/strong><\/h2>\n

Need for more details<\/strong>– First,<\/strong> is related to countries that will be exempted.<\/strong><\/p>\n

Second<\/strong> is related to emissions t<\/strong>hat will be included in the levying of the import tax. Are indirect emissions<\/strong> embodied in inputs like machines to be considered or only direct emissions? <\/strong><\/p>\n

Third <\/strong>is related to products<\/strong> that are to be included in CBAM.<\/p>\n

International laws<\/strong>– The WTO has promoted free trade<\/strong>. The CBAM is a unilateral move, against the spirit of multilateralism<\/strong>.<\/p>\n

The problems of measurement<\/strong> mean that it could be used for protectionism. It targets production processes that the WTO does not approve of.<\/p>\n

Revenue collection<\/strong>– The analytical framework for tackling climate change<\/strong> is based on putting a price on carbon emissions.<\/strong><\/p>\n

Burning of carbon anywhere in the world affects climate change across the world. So, there is a need for a global price for carbon<\/strong> to redress this global \u201cexternality\u201d. <\/strong><\/p>\n

In the absence of a world government, who gets to keep the tax revenue <\/strong>is important. In the case of the CBA, it is the EU that will keep the revenue.<\/p>\n

Concerns related to the global south<\/strong>– This mechanism also seeks to penalise \u201cfree riders<\/strong>\u201d. A free rider is one who is not contributing towards fighting climate change, although has the means to do so. The country that fits this definition is the US.<\/p>\n

The developing countries did not create the problem and have limited means to pay for a \u201cclean up\u201d.<\/strong><\/p>\n

There are equity concerns<\/strong> also. It\u2019s designed to help rich countries avoid paying for creating the climate problem.<\/p>\n

Other issues<\/strong>– There is some arbitrariness<\/strong> involved in the coverage of a CBAM. It is not always easy to infer the process of production<\/strong> by looking at the final product.<\/p>\n

CBAM is targeting the emissions embodied in a limited number of traded goods<\/strong>. Its effect on climate change<\/strong> is likely to be small.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cWhy EU\u2019s carbon levy helps rich countries get richer\u201d published in \u201cThe Indian Express\u201d on 22nd June 2023. Syllabus: GS3- Environment Relevance- Issues related to climate change News– EU has introduced a Carbon Border Adjustment Mechanism (CBAM). What is the issue of differentiated responsibility sharing in climate… Continue reading Why EU\u2019s carbon levy helps rich countries get richer<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[59,216,10500],"class_list":["post-249155","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-environment","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=249155"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249155\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=249155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=249155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=249155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}