Business Matters | How can EU’s carbon tax hurt India?

Business Matters | How can EU’s carbon tax hurt India? | The Hindu

Рет қаралды 23,197

Жыл бұрын

The European Union had in July last formalised a method to stop ‘carbon leakage’ or moving production of high-polluting products to nations outside of the EU in its bid to go green. This is called the Carbon Border Adjustment Mechanism.
Though the tax will be implemented in 2026, the transition period will begin in 2023, when importers in the EU will have to report (every quarter without attracting levies) the related emissions on goods brought in.
An article at the World Economic Forum website says: “CBAM will initially cover several specific products in some of the most carbon-intensive sectors at risk of "carbon leakage": iron and steel (including some downstream products such as nuts and bolts), cement, fertilizers, aluminium, electricity and hydrogen made using coal. The European Parliament also signalled a clear intention to include plastics and chemicals by 2026 and all sectors covered by the EU Emissions Trading System (ETS) by 2030.”
CBAM is part of the EU’s plan to cut greenhouse gas emissions by 55% by 2030 compared to 1990 levels, under the European Climate Law.
How does punitive pricing work?
An article in BusinessLine last week showed how Europe's emissions trading system or the ETS works. Polluting industries get a certain number of European Emission Allowance units, or EUAs - each equivalent to one tonne of CO2 emissions. If a company’s processes add to the pollution by more than the allowed level, it has to buy EUAs in the market. If it can show it has lowered pollution further, then it has surplus EUAs.
Which other countries have similar rules in place?
In its explainer on the CBAM, the EU says such mechanisms are in place in some regions around the world, such as California, where an adjustment is applied to certain imports of electricity.
It also says countries such as Canada and Japan are planning similar initiatives. In addition, the IMF and the OECD have recently carried out work to study how such measures could support international efforts to reduce greenhouse gas emissions.
So why is this a problem for other countries? Do the WTO rules allow this? What is India going to do?
Script and presentation: K. Bharat Kumar
Production: Shibu Narayan
Videography: Johan Sathyadas
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#europeanunion #carbontax #carbon

Пікірлер: 41

@ssb3536 Жыл бұрын

From the past, there is always a sheer transition and evolution from a highly polluting cycle to less emission mechanism. If CBAMs are imposed, it could possibly pave way for innovations to bolster further optimizations and reductions in carbon emissions. Thank you Sir

@bratteshwara Жыл бұрын

Quite possible. But other parties in the equation tread with caution, to protect their interests...

@willdo969 19 күн бұрын

You video is the best I can find to help me understand the CBAM.

@GSatarkar 9 ай бұрын

Very good presentation sir . Will be looking forward to such educative videos 🙏🏽

@prabhakarkrishnaswami4148 Жыл бұрын

This should act as an incentive for India reduce its carbon footprint.

@bratteshwara Жыл бұрын

Good nudge, yes.

@amithabv1060 Жыл бұрын

That's alright. But who will pay for it?

@prabhakarkrishnaswami4148 Жыл бұрын

Climate change is an existential threat for the whole world. It is everybody's problem so every country should take responsibility for controlling their own carbon footprint.

@rajeshpillaik Жыл бұрын

To a certain extent yes but look at another scenario where China stopping export to US and EU Same materials exported to elsewhere there is no Carbon tax What would India do ? I dont think EU has that kind of power to impose on other economies especially when Dedollarization happens.

@aSenseSeeker Жыл бұрын

But lets not forget the hypocrisy of the western nations who are built on Carbon emissions, now putting the economic burden on Developing countries to clean up the mess they contributed to most heavily

@ivygeorge5342 Жыл бұрын

Right decesion sir

@prasanthrainy Жыл бұрын

Tq😊

@thescentofmango Жыл бұрын

Thank you sir.

@HunterGatherer90 Жыл бұрын

Why should India bearing the burden of extra carbon emission to export Europeans. they are getting the essential raw materials so they have to pay the price. otherwise increase the price of raw materials..

@SaurabhSharma-gr5xg Жыл бұрын

Any measure seeking to impose tariff or non tariff barriers must be predicated upon common but differentiated responsibilities. CBAM or other versions of such protectionist measures under the garb of sustainability smacks of climate justice. It's time that the western world sheds it's hypocrisy on climate change and fulfil its climate finance and technology transfer obligations that it has reneged for many years now. For the developing and the least developed world it is equally imperative to shore up adaptation efforts and gradually reduce dependence on fossil fuels through adopting sustainable lifestyles. A global partnership between the developed countries and the emerging economies is the need of the hour for arriving at a lasting solution to the climate conundrum.

@bratteshwara Жыл бұрын

Well articulated!

@lovefromthar8989 Жыл бұрын

Really? Is it that simple to make up, or slap Western hypocrisy? The emissions in manufacturing green energy-producing instruments are ginormous in retrospect of the emissions/production ratio. The West has manufactured and stored, with, of course, better technological aids, massive infrastructural assets of "green" energy production. And now that the tax has been imposed, they are on the back seat, more than ready to reap the benefits of having emitted ridiculously, at the cost of those they feel authorized to decide the path of. And what are sustainable lifestyles? With growing economy, space, resources, and techniques of even faster expansion, will be increasingly sought. In the grand scheme of things, we have nothing "real" that is sustainable!

@rohitpg12 Жыл бұрын

It would only increase costs manifold making already inflation battered economies more vulnerable leading to a collective collapse. Addressing Carbon leakage should be a collective responsibility and we don't see much cooperation in that direction, instead, framing such unrealistic regulations and taxes much before the efforts to reduce emissions, is not well thought out.

@bratteshwara Жыл бұрын

You said it! Collective responsibility...

@justanotherperson2576 Жыл бұрын

If the EU must levy a carbon tax on India, then India should make the UK pay the reparations! There shall be no other way around it!!

@rajeshpillaik Жыл бұрын

EUROPEAN UNION itself in big trouble . If they stop importing they only suffer . This is EU last resort to generate money without any hardwork . Both EU and US thrived on reserve currency status. These economies are thriving, and they print their currencies endlessly just because of reserve currency status so inflation can be passed to those who kept these currencies as reserve. For example to Print a 100 $ bill it takes just 17 cents which is equal 2.55 rupees . Once the 100 $ bill gets printed and comes to market, to get that bill we have to offer INR 8200 equivalent of goods and services. Simlar case for EURO . As per the latest paper issued by Chinese external ministry, China is systematically stopping export to west. By 2024 de Dollarization happens EU will end up in extreme poverty as the world moves to a new pegged currency. ( BRICS) Germany for instance already moved to coal to produce electricity. And EU lecturing rest of the world

@NaveenKumar-vj9sc Ай бұрын

If everyone has to play a fair game towards a more sustainable world. Balance is the key. So, if CBAM is levied on importing countries then find a similar mechanism which will bring all or some percentage of the taxed money back to the imported countries to make the production more sustainable in the future thus overarching goal is met. Since the EU is in the forefront of taking climate actions they must be adept in understanding the new mechanism. It will not be economically viable for them but definitely meets the overarching goal.

@p-a-r-a-d-o-x6447 Жыл бұрын

Developed economies realisation of developmental brim, hence entering into alternative ways like regulatory mechanisms (just creating documents) to swindle and sustain (middle class - otherwise called) "developing economies"....

@milindtrivedi9024 Жыл бұрын

We should try for anti carbon tax and should focus for nature india should not be guru but india should be oxygen of the world

@khumgangte9246 Жыл бұрын

The Europeans has been exploiting since time immemorial and till now they somehow manage to exploit.Those affected countries should raise the price of export goods.

@Hopefulalwayz Жыл бұрын

Tarrif should be levied by developing countries on Developed countries who had done a great damage due to which we are facing climate change.

@pranavjain1501 6 ай бұрын

If the final tax is to be imposed on EU importers then how will Indian Exporters be impacted? Pls explain

@abdussamad1891 Жыл бұрын

FTAs is with UAE not UK ..

@bratteshwara Жыл бұрын

In talks for one with UK

@dannycbe949 Жыл бұрын

Excellent..let us impose a "Common sense Tax", & an "Ex colonizer" tax on these holier than God specimens

@siddharthbhoi8731 Жыл бұрын

there should be some room left for developing countries like india china etc in the form of incentive or they could abate taxes to some extent . 20 to 35 percent is huge.