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Ecology & Environment
Mahesh

18/11/22 13:03 PM IST

Carbon Border Tax

In News 
  • A group of countries including India has opposed the carbon border taxes policy at the COP27 in Sharm El Sheikh, saying it could “result in market distortion”.
About Carbon Border Tax 
  • A carbon border adjustment tax is a duty on imports based on the amount of carbon emissions resulting from the production of the product in question. As a price on carbon, it discourages emissions. As a trade-related measure, it affects production and exports.
  • The proposal is part of the European Commission’s European Green Deal that endeavours to make Europe the first climate-neutral continent by 2050.
  • A carbon border tax is arguably an improvement from a national carbon tax.
  • A national carbon tax is a fee that a government imposes on any company within the country that burns fossil fuels.
Issues 
  • The BASIC (Brazil, South Africa, India and China) countries' grouping had opposed the EU's proposal in a joint-statement terming it "discriminatory" and against the principles of equity and 'Common but Differentiated Responsibilities and Respective Capabilities' (CBDR-RC).
  • These principles acknowledge that richer countries have a responsibility of providing financial and technological assistance to developing and vulnerable countries to fight climate change.
  • The EU’s notion of having a uniform standard all over the world for the environment is not borne out by the global consensus contained in the Article 12 of the Rio Declaration which says that the standards applicable to developed countries cannot be applied to developing countries.
  • The greenhouse content of these imports would also have to be adjusted in the greenhouse gas inventories of the importing countries which essentially implies that GHG inventories would have to be reckoned not on the production basis but at the point of consumption basis.
Source- Indian Express 

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