India, along with Brazil, South Africa, and China, issued a joint statement on Wednesday saying that carbon border tax must be avoided as it can result in market distortion and aggravate the trust deficit among parties. The statement was issued during the ongoing Conference of Parties (COP) in Sharm El Sheikh, Egypt.
European Union’s (EU) Carbon Border Adjustment Mechanism is a policy to tax products such as cement and steel, that are extremely carbon intensive, with effect from 2026. The carbon border tax is basically a proposed surcharge that companies have to pay to sell their products in the EU as compensation for the pollution that was emitted during the manufacturing process, in a bid to incentivise use of cleaner energy.
Brazil, India, South Africa and China – members of the BASIC group – are significantly dependent on coal and want to exercise their right to use fossil fuel in the interim during their countries’ eventual transformation to clean energy sources.
The joint statement delivered by BASIC reiterates doubts about developed countries showing leadership or responding with a matching progression of effort. The statement pointed that developed countries had “backtracked on finance and mitigation commitments and pledges” and there was a “significant increase” in the consumption and production of fossil fuels in the past year by developed countries even as they continue to press developing countries to move away from the same resources. “Such double standards are incompatible with climate equity and justice.”
The opposition to the policy that shifts the burden of cleaning the environment towards developing countries also comes at a time when developed countries are facing pressure to pay for the environmental damage their past industrial actions have caused. Loss and damage compensation – the cost paid by rich, developed and industrialised countries that have been responsible for a major chunk of emissions in the environment to poorer, developing countries that are bearing the brunt of climate change without sufficient financial means to avert the damage caused – has been a significant demand put forth during the Climate Summit this year.
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