BAKU, Azerbaijan, February 26. The Asian
Development Bank (ADB) argues that the EU’s planned adoption of a
carbon tax on eurozone imports of steel, cement, and power (which
generate substantial carbon dioxide emissions) from 2026 will have
only a minor impact on the worldwide process of fighting greenhouse
gas emissions, Trend reports.
“The EU’s Carbon Adjustment Mechanism (CBAM), which takes effect
in 2026, levies import duties on steel, cement, energy, and other
products that emit carbon dioxide. The EU step is connected to
reducing carbon leakage from nations with less stringent
restrictions on greenhouse gas emissions to countries with strict
regulations and high taxes on carbon dioxide emissions,” the
published research of the ADB says.
However, the bank’s experts estimate that the measures outlined
by the EU will reduce global carbon dioxide emissions by less than
0.2 percent compared to the carbon dioxide emissions trading scheme
already in place (from €100 to $108 per ton).
“According to the Asian Economic Integration Report (AEIR), the
introduction of a carbon tax could reduce global exports to the EU
by about 0.4 percent and exports directly from Asia to the EU by
about 1.1 percent. The output of some producers in the EU could
also be negatively affected,” ADB notes.
”Thus, the fragmented nature of carbon tax initiatives, in
terms of sectors and regions covered, can only partially curb
carbon dioxide emissions,” the research says.
ADB chief economist Albert Park believes that to significantly
reduce carbon emissions globally while also making sure climate
efforts are more effective and sustainable, carbon pricing
initiatives need to be extended to other regions outside the EU,
especially Asia.
Meanwhile, there should be appropriate incentive mechanisms to
encourage the widespread implementation of duties (tariffs) on
carbon dioxide emissions outside the EU.
“Carbon dioxide emissions along the entire production and supply
chain are growing faster in Asia than in other parts of the world.
So, trade in environmentally friendly products and services should
be encouraged; green technology transfer should be promoted; and
governments should be supported in promoting green infrastructure
and investment. There should be global cooperation to develop
universally recognized systems to account for greenhouse gas
emissions from a range of products and services,” the ADB document
noted.
To note, the ADB has been operating since 1966 and includes 68
countries.
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