Will the EU's carbon import tax hurt poor nations?

(Reuters, 30 Mar 2022) An EU border levy on climate-polluting imports aims to spur greener heavy industry - but could have costs for Africa

Battling to halve its planet-warming emissions by 2030, the European Union plans to impose the world's first carbon border tax on companies that import carbon-intensive products such as cement, steel and fertiliser.

The border levy would protect EU companies that produce greener products from their competitors abroad whose manufacturers can produce at a lower cost in part because they are not charged for their carbon emissions.

But critics say putting a carbon price on imports could have unintended consequences, such as crippling trade with less-developed economies in Africa and in turn stifling their own ability to cut emissions.

What is the 'Carbon Border Adjustment Mechanism'?

Known as the CBAM, the proposed import tariff aims to stop European firms from cutting emissions by simply transferring their polluting production outside the EU, to countries with lower environmental standards.

It would not cover all products, instead targeting carbon-heavy goods such as cement, iron, steel, aluminium, fertiliser, and electricity.

External link

Reuters, 30 Mar 2022: Will the EU's carbon import tax hurt poor nations?