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EU forces pace on carbon cuts, challenges others to follow

(Reuters, 15 Jul 2021) A proposed carbon border levy would seek to impose on trading partners a carbon price reflecting the level set by the EU's carbon emissions market, the largest of its kind in the world.

The European Union is using its heft as a wealthy trade bloc of half a billion consumers to set the global pace of climate change action, challenging others to match the ambitions of its latest carbon cutting plans.

The question now is whether the EU gambit becomes an established benchmark upon which investors and sectors like the auto industry set transition strategies and how big emitters like the United States and China respond ahead of UN climate talks later this year.

"Amongst G7 and G20 nations, the EU position is now the explicit global benchmark," said Julian Poulter, Head of Investor Relations at Inevitable Policy Response, a consultancy on environmental economics.

"It will exert a new influence on that basis, in other industrialised nations and their financial sectors and increase pressure on those nations that remain as climate outliers and spoilers," he added.

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Reuters, 15 Jul 2021: EU forces pace on carbon cuts, challenges others to follow