What is carbon border tax, which India opposed at COP27? In a statement, the BASIC group, which consists of India, China, Brazil, and South Africa, emphasized the need to avoid “unilateral measures and also discriminatory practices, such as mainly carbon border taxes, that could cause market distortion and exacerbate the trust deficit among Parties.”
At the COP27 in Sharm El Sheikh, a group of nations, including India, expressed opposition to the carbon border taxes policy, stating that it could “result in market distortion.”
In a joint statement dated November 15, the BASIC group—which consists of India, China, Brazil, and South Africa—said that “unilateral measures and also discriminatory practices, such as the carbon border taxes, that could lead to market distortion and exacerbate the trust deficit among Parties, must be avoided.” Basic nations demand that developing nations react in unison and with solidarity to any unfair transfer of obligations from developed to developing nations.
The European Union (EU) intends to tax carbon-intensive goods beginning in 2026, including iron and steel, cement, fertilizer, aluminum, and electricity generation.
What are border taxes on carbon?
Simply put, the carbon border tax entails levying an import tax on goods made in nations with laxer environmental regulations than the country from which they are being purchased.
While the tax’s supporters, including the EU, argue that it will protect the environment and give businesses a level playing field, those who oppose it label the tax as unfair and protectionist. They argue that it unfairly places the burden of climate compliance on developing nations, who historically have polluted the environment much less and are frequently more vulnerable to the effects of climate change.
“Carbon leakage”: Justification for the tax
Some developed nations charge their own carbon-intensive businesses exorbitant fees in an effort to reduce emissions. Businesses may be able to avoid this by relocating production to a nation with less restrictive regulations, a process known as carbon leakage.
EU’s Border Adjustment Mechanism for Carbon
The Carbon Border Adjustment Mechanism was developed by the EU in 2021. The CBAM system will operate as follows: EU importers will purchase carbon certificates corresponding to the main carbon price that would have been also paid, had the goods been produced in accordance with the EU’s carbon pricing rules, according to the European Commission’s website. This is done in compliance with WTO rules and other international obligations of the EU. For the EU importer, the corresponding expense can be fully deducted once a non-EU producer can demonstrate that they have already paid a price for the current carbon used in the main production of the main imported goods in a third country.
Regarding carbon leakage, it states that there is a “strong risk of the so-called ‘carbon leakage’ — i.e., companies based in the new EU could move carbon-intensive production abroad to mainly take advantage of the lax standards, or EU products could be also replaced by more carbon-intensive imports” as we raise our own climate ambition.
The CBAM “will equalize the price of the carbon between domestic products and also imports and also ensure that the EU’s climate objectives are not undermined by the production relocating to the countries with less ambitious policies,” the document claims.
California in the US levies fees on some electricity imports, in addition to the EU. Similar plans are being made by Canada and Japan as well.
India’s place
India has insisted that developed nations cannot abdicate their own responsibilities while placing additional pressure on developing nations to combat climate change. India stated at COP27 that all fossil fuels, not just it be coal, which has been targeted by developed nations and on which India is heavily dependent, needed to be phased down.
No industry, fuel source, or gas should be singled out for the action in the fight against climate change, according to environment minister Bhupendra Yadav. Countries will take the appropriate action in accordance with their national circumstances in the spirit of the Paris Agreement.
Yadav also emphasized that not all nations needed to aim for the same degree of decarbonization in order to make a “just transition” to cleaner energy sources. For India, a just transition entails moving to a low-carbon development strategy over a period of time that guarantees growth, employment, and the security of food and energy.
COP27 | “carbon border tax” is opposed by India, China, Brazil, and South Africa-
With effect from 2026, the European Union has been proposed a policy to tax goods with a high carbon footprint, like cement and steel.
As the 27th Conference of Parties (COP) in Sharm El Sheikh approaches its conclusion and efforts to reach a binding agreement are stepped up, a group of nations, including India, has stated that carbon border taxes, which could lead to market distortion and exacerbate the lack of trust between parties, must be avoided.
The Carbon Border Adjustment Mechanism is a policy that the European Union wants to implement starting in 2026 to tax carbon-intensive goods like steel and cement.
Large economies that are heavily dependent on coal, such as Brazil, India, South Africa, and China, collectively known as BASIC, have very long expressed their concerns and reaffirmed their right to currently use fossil fuel in the interim while their nations eventually transition to clean energy sources.
“Unilateral actions and discriminatory practices, like carbon border taxes, must be avoided as they may cause market distortion and worsen the lack of trust between Parties [signatory nations to the United Nations climate agreements]. Basic nations demand that developing nations react in unison and with solidarity to any unfair transfer of obligations from developed to developing nations.
In a joint statement released on Wednesday, they expressed “grave concern” over the developed countries’ continued lack of leadership and equal effort in their responses. Even as they continue to urge developing countries to move away from the same resources, developed countries had “backtracked on finance and also mitigation commitments and pledges” and there had also been a “significant increase” in the main consumption and production of fossil fuels in the previous year, according to their statement. “Climate equity and justice are incompatible with such double standards.”
Despite the opportunities and connections with “loss and damage,” they claimed that adaptation was still not given the fair and thorough consideration it deserved in the U.N. climate framework process. The latter is a demand made by developing nations for an institutional system to finance nations impacted by climate change for the already done environmental damage.
India blocks an attempt to group it with previous polluters at COP27-
During discussions on the “Mitigation Work Programme” at the ongoing U.N. climate summit in Egypt, India, with the main support of other developing nations, then a move by wealthy nations to mainly concentrate on all the top 20 carbon dioxide emitters, sources said on Monday.
Developed countries demanded during the very first week of the climate talks that all top 20 emitters, including China and India, discuss drastic emission reductions rather than just the wealthy countries that have historically been at fault for climate change.
As the Sharm El Sheikh COP27 climate summit nears its conclusion, efforts are being made to reach specific agreements and conclusions. A policy also known as the “Carbon Border Adjustment Mechanism” has been proposed by the European Union (EU) in this process to tax materials with a high carbon footprint, such as steel and cement, beginning in 2026.
Many nations view carbon prices as the most economical way to combat climate change, which has already wreaked havoc on the world by causing food crises, energy crises, water crises, and heat waves, among other problems. However, a group of nations, including India, China, Brazil, and South Africa, are opposed to this idea, claiming that carbon border taxes could lead to market distortion in addition to widening the already present trust gap between parties, both of which must be avoided in order to develop an effective response to climate change.
Products that are high in carbon
This group of nations opposes the idea of levying on imported carbon-intensive goods because they believe that doing so could change how trade is viewed in the fight against climate change in the years to come. Some have even dubbed such measures “green protectionism.” An import duty based on the quantity of carbon emissions produced mainly during the production of the products in question is known as a carbon border adjustment tax. It is put in place to deter emissions.
Protectionist technology
Many believe that a border tax on carbon may have an impact on certain carbon-intensive products’ production and exports as a trade-related measure. Experts debated the concept of this tax for years in an effort to find a workable solution to the threat that climate change poses to humanity’s very existence.
There is also concern that if this tax is created unilaterally, trading partners may view it as unfair, and there is a chance it will turn into a protectionist tool that may encourage some nations to unfairly shield domestic industries from foreign competition, a practice known as “green protectionism.” While the EU may assert that it encourages fair competition and level playing fields for EU and non-EU businesses, this is a point of contention among its member nations.
Bhupender Yadav has voiced his opinions.
Bhupender Yadav, India’s environment minister, emphasized that all nations have a right to their fair share of the global carbon budget and must limit their cumulative emissions to this amount. He claimed that in order for developed countries to achieve net zero much sooner than their current target dates, physical access to the current carbon budget must be provided. He also stated that access to the fair share of the entire budget must be made available, emphasizing that this can be accomplished through significant negative emissions and the monetization of the developed nations’ carbon debt.
Displaying unity is essential.
However, it seems that everyone taking part is very concerned about the damage that climate change is causing all over the world. They think that COP27 is a chance to show solidarity in the face of an existential threat that can only be defeated by coordinated action and successful implementation.
Connects biodiversity and climate
The opening of COP27’s Biodiversity Day was marked by the COP27 Presidency’s connection between biodiversity and climate. The agenda for the meeting was set by a high-level opening on “Connecting Climate and Biodiversity,” which addressed the urgent need for integrated solutions at scale. Along with Germany and the International Union for Conservation of Nature, the ENACT initiative for environmentally friendly solutions was also launched on Wednesday, November 16. (IUCN).
Rapid loss of biodiversity
The context for the relationship between biodiversity and climate change, as well as shared solutions and outlined pathways to scale up action that addresses biodiversity loss and climate action, are set by three pillars: Present, Hope, and Vision. The speakers agreed that biodiversity is essential to people’s economic, social, and cultural well-being but pointed out that climate change is hastening biodiversity loss globally. Ecosystems are being rapidly destroyed, which makes people more vulnerable to the effects of climate change.
The subject of coral reefs was highlighted.
The importance of coral reefs was also highlighted because they support more than 500 million people worldwide, mostly in developing nations, and have the highest level of biodiversity of any ecosystem on the planet. The only chance for the survival of some of the most threatened ecosystems is to keep the global average temperature well below 2C above pre-industrial levels.
Coral reefs are of particular importance. The Red Sea Initiative, which was launched last week by the Egyptian government in collaboration with the United States, through USAID, UNDP, and the Global Fund for Coral Reefs, is an example of how to protect priceless biodiversity and ecosystems. The corals of the Red Sea are among the last remaining reefs in the twenty-first century. Contributors announced nearly 172 million dollars in new pledges for the Adaptation Fund and the developing nations most vulnerable to climate change.
Billions of dollars are required.
Furthermore, everyone agreed that financing in the trillions of dollars is required to help developing countries transition to clean energy, adapt to a changing climate, and recover and rebuild from damages and losses already incurred in order to combat the deteriorating climatic conditions.
The role of ecosystem preservation, restoration, and management in preserving carbon stocks and sequestering carbon was discussed by ministers and scientists. Also discussed were the socioeconomic costs of biodiversity and the use of natural solutions to combat climate change and maintain biodiversity. Hope for Coral Reefs featured discussions on how climate change is affecting coral reefs all over the world, but especially in Egypt’s Red Sea, as well as efforts to change things through science and innovation.
Earlier, the Africa Just & Affordable Energy Transition Initiative was introduced by the COP27 Presidency (AJAETI). The AJAETI initiative aims to give all Africans access to clean energy while meeting the energy needs for Africa’s economic development, according to COP27 President HE Sameh Shoukry on this occasion.
Driving economic development and assisting in the creation of jobs in Africa in order to establish a contemporary, dependable, and sustainable energy infrastructure. In order to aid global mitigation efforts, Africa has a wealth of untapped resources that could be used to produce electric batteries, wind turbines, and other low-carbon technologies.
edited and proofread by nikita sharma
