Eye on Asia | Emerging Asia at risk from EU’s protectionist carbon border tax

Name: China installs record number of solar panels on rooftops in race for carbon neutrality
Uploaded: 2022-07-03T07:30:25.000Z
Duration: 1 min 5 s
Description: China installs record number of solar panels on rooftops in race for carbon neutrality

The EU tax shifts the carbon burden to the commodity-rich emerging economies least responsible for today’s climate crisis while fattening its Covid-19 relief fund

Singapore, as a leading regional carbon services hub, offers some solutions but Asia as a whole needs to find pragmatic ways to defend against climate inequality

Reading Time:3 minutes

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A worker loads palm oil fruit to be transported to factories in Pekanbaru, Riau province, Indonesia, on April 27. Indonesia, which supplies some 335,000 tonnes of crude palm oil to the EU every month, is already working on a carbon tax framework. Photo: Reuters

Bo Bai

Published: 3:30pm, 3 Jul 2022

The European Parliament recently passed several landmark proposals as part of the European Union’s Fit for 55 climate master plan. The vote was timely as continental Europe confronts a record-breaking early summer heatwave, pointing to the all-too-real effects of human-induced climate change.

One key piece of climate policy on the table was the carbon border adjustment mechanism (CBAM) which holds exporters accountable for the direct and embedded emissions of their goods as they enter the EU.

Coming into effect in January 2023, the so-called carbon border tax covers industries and commodities including iron and steel, refineries, cement and fertilisers, and was recently expanded to include organic chemicals, plastics, hydrogen and ammonia.

Though a tool to encourage climate action, the CBAM raises critical questions about emissions accountability. Crucially, it points to growing trade and climate protectionism that will critically disadvantage emerging economies in the Global South. Developing nations, in Asia especially, should take note.

The divide between industrialised and post-industrialised nations versus developing nations cannot be overstated. The United States has emitted more carbon than any other country and is responsible for 25 per cent of all historical emissions, followed by the EU and the UK, which are collectively responsible for 22 per cent.

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China installs record number of solar panels on rooftops in race for carbon neutrality

However, instead of taxing the largest cumulative emitters, the CBAM shifts the liability and places a new financial and administrative burden on commodity-rich emerging economies, which are least responsible for today’s climate crisis.

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.css-1m2rp1p{color:#34b8b5;}Eye on Asia | Emerging Asia at risk from EU’s protectionist carbon border tax

Eye on Asia | Emerging Asia at risk from EU’s protectionist carbon border tax