The Big Picture - Carbon Border Tax: Why is India opposing IT

At the two-day G-20 ministerial meeting on environment and climate change in Italy, developing countries, including India, are expected to raise their concerns over the European Union’s recent proposal on the first of its kind carbon border tax.Under this proposal, the 27 EU nations will impose border tax on imports of carbon-intensive goods.Yet to be legally formalised, the tax plan could come into force from 2026.On similar lines, Democratic lawmakers, earlier this week, introduced a legislation establishing a carbon tariff on certain imports like steel as a means to fight climate change.So what exactly is a carbon border tax? Why do developed countries want to impose such a tariff and why are developing nations opposed to the idea?

Guests:
1- Dr. Prodipto Ghosh, Distinguished Fellow,TERI & Former Secretary, Ministry of Environment Forest And Climate Change
2- Dilip Sinha, Former Ambassador… He has served as Special Secretary for INTERNATIONAL Organisations and Environmental Diplomacy

Anchor: Teena Jha

[shivaputra]

SUMMARY : Carbon Border Tax: Why is India opposing IT

* Carbon Border Tax is proposed by European Union.
* This is being opposed by developing countries like India, in the G20 Meeting in Italy.
* Under this proposal, the 27 EU nations will impose border tax on imports of carbon-intensive goods.
* Yet to be legally formalized, the tax plan could come into force from 2026.


Panelist 1 : Dilip Sinha, Former Ambassador…

1. For EU It is first of its kind, Idea behind Carbon Border Tax is to incentivize companies outside EU like Steel, Cement fertilizers to adopt carbon friendly technologies.
2. For them a tax will be imposed for that a certificate will be given by the EU and tax will be deducted as per Carbon emissions.
3. Countries who have own carbon trading system, will be benefited from this, as they can get rebate on the tax paid.
4. There is certainly the protectionism by EU, India-EU have good trade negotiations.
5. There is split between Developed and Developing with regard to Environment.
6. BASIC(Brazil, India, China) are opposing the move by the west....China is protesting the system.
7. But recently China started Carbon trading system, , so while protesting it is also preparing for the new system.
8. So India will badly effected if it doesn't start with the changing scenario.
9. Our approach : Look at EU Scheme, if we are fit with the new system it has to go with it.
10. Our principle must be to protect our national interest.
11. We don't frame the Trade rules but WTO, So we have to comply with the system and promote the export for EU and West.
12. There are Developing countries who suffer from the Trade issues, But right now WTO Dispute settlement body is not working.
13. EU brought this system earlier, at global level countries can pressurize EU to take down the scheme.
14. India is not the target for EU, But China, Russia, Turkey whose carbon emitting is rising fast.
15. Our emission from coal, steel is very small.
16. Commitment to Envi. from West is fluctuating: US under Trump was reluctant, now Under Biden it is coming forward.



Panelist 2 : Dr. Prodipto Ghosh, Distinguished Fellow, TERI

1. EU has imposed many such unilateral actions.This is undesired form of protectionism
2. I am afraid that the legal implications in UNFCCC and WTO.
3. Uniform Environmental Standards under Rio Declaration clearly says standards applying for developed will not be applied fro developing countries.
4. The document says Adjustment which is trying to run away from the legal implications.
5. Our exports for the EU Of steel, Aluminium, fertilizer is small, We have to protect from the loss.
6. We don't have explicit carbon taxes scheme, but energy taxes which are very high.
7. If we convert this into Carbon tax. our rank can be very We are different from the approach by China.
8. India has goals under NDC(Nationally Determined Contributions): EU Can't tell India has not any ambitions....It can't criticize.
9. EU said it as important for reducing carbon emissions.
10. India's emission profile is very less: Per capita emission is very low.


" We must be in the forefront in Environmental politics, But we must also be cautious abt negotiations and Intl. law. "

Thank U:)

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[radhikatalekar]

Wonderful anchor! The precision and elegance with which she has conducted this programme, highly appreciate this.

[krishnachandrabandopadhyay]

very right comments by dr ghosh of teri

[Akash.-rr]

From the discussion *I have formed some opinion*, which is as follows:-

This primarily seems to be a *protectionist measure*, disguised as a climate-recovery programme.

But given that the E.U. is an independent body, and a powerful one too, they have all the rights to form their own rules.

India, for its benefit, needs to work on three fronts:-

1. *Bilateral negotiations* with E.U. based on our robust records on climate action and ambition(INDC).

2. Work on *developing our own carbon market* so that our exporters can get "rebates", in case the TAX comes into effect in 2026.

3. *Mini-lateral negotiations under BASIC.*
But we should not go overboard with China and take leadership in taking bullets. We are not a very big exporter of steel and aluminium to EU anyhow. The main targets are China, Russia, and Turkey. Let them fight.

The only serious problem here is the *clubbing of climate change and trade.* This, though starting with only 4 products, can be expanded further on the same pretext. For this we need to go for multi-laterals, preferably WTO.

Your comments/suggestions/ reviews are most welcome.

THANK YOU.

[subhjyoti]

Our principle should be to protect our interest

[nitusharma]

this discussion is helpful for GS 3 paper 😔

[mvpmusicverse]

This program comes on daily basis or on weekly basis plz tel lll

[subhjyoti]

Items under carbon tax steel, cement, fertilizer, aluminum

[ravi]

CARBON BORDER TAX[CBT] would be imposed by importers country [EU] on exporters of carbon potential products like fertilizer, cement, still and aluminum in the account of adopting climate-friendly technology[by 2026].
the developed world considers CBT as a climate action plan but the developing countries have been opposing it because of the protectionist character as well as a unilateral decision. As per the RIO SUMMIT measures applicable for developed countries do not be applied to developing countries.
India is the 2nd largest exporter to the EU, however, carbon potential products are less than RUSSIA, CHINA, and TURKEY. In this context, INDIA should have to focus on negotiation talks in the national interest.

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