Carbon border tax | UPSC Daily Current Affairs 2023

👉India, China, Brazil, South Africa opposed ‘carbon border tax’ proposed by European Union in the 27th edition of the Conference of Parties (COP) in Sharm El Sheikh.

👉The European Union has proposed a policy called the Carbon Border Adjustment Mechanism to tax products such as cement and steel, that are extremely carbon intensive, with effect from 2026.

👉BASIC, a group constituting Brazil, India, South Africa and China, and therefore large economies that are significantly dependent on coal, has reiterated their right to use fossil fuel in the interim during their countries’ eventual transformation to clean energy sources.

👉Carbon border adjustment tax is a duty on imports based on the amount of carbon emissions resulting from the production of the product in question.

👉As a price on carbon, it discourages emissions.

👉There is the risk that it becomes a protectionist device, unduly shielding local industries from foreign competition in so-called ‘green protectionism’.

25/03/2023
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