{"id":136837,"date":"2024-10-10T19:30:16","date_gmt":"2024-10-10T14:00:16","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=current-affairs&#038;p=136837"},"modified":"2025-02-13T15:59:52","modified_gmt":"2025-02-13T10:29:52","slug":"european-unions-carbon-tax","status":"publish","type":"current-affairs","link":"https:\/\/pwonlyias.com\/stage\/current-affairs\/european-unions-carbon-tax","title":{"rendered":"European Union&#8217;s Carbon Tax"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-136808 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/102-6707d741abc88.webp\" alt=\"Carbon Tax\" width=\"270\" height=\"307\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/102-6707d741abc88.webp 575w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/102-6707d741abc88-264x300.webp 264w\" sizes=\"(max-width: 270px) 100vw, 270px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Finance Minister\u00a0 called out the European Union\u2019s initiatives such as the Carbon Border Adjustment Mechanism (CBAM) and Deforestation rules as \u2018unilateral\u2019 and \u2018arbitrary\u2019<\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>More on the news<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">She highlighted that the European Union\u2019s decision to impose a carbon tax on Indian products such as steel and cement is aimed at hurting Indian industries.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The levy is a pretence to convert the EU&#8217;s own \u201cdirty\u201d steel into green at another\u2019s cost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India has decided to retaliate against EU steel tariffs, which have led to trade losses of $4.41 billion from 2018 to 2023.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Course<\/a><\/span><\/p>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.7993%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\">\n<h2><span style=\"font-size: 18pt; color: #000000;\"><b>\u201cFit for 55 in 2030 package\u201d<\/b><span style=\"font-weight: 400;\"> .<\/span><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">The overall goal of the European Union (EU) in its efforts to control climate change is to achieve climate neutrality by 2050.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">To achieve this goal, the Climate Law has been enacted to ensure that all EU policies aim at climate neutrality.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">This law was implemented in July 2021 through the \u2018Fit for 55 Package\u2019. The number 55 symbolizes the target of reducing GHG at least 55% by 2030 compared to 1990 levels.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">This package includes legal tools to implement this goal in the fields of climate, energy, land use, traffic and taxes.<\/span><\/li>\n<\/ul>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<h2><span style=\"font-size: 18pt;\"><b>Carbon Border Adjustment Mechanism (CBAM)<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is part of the EU\u2019s <\/span><b>\u201cFit for 55 in 2030 package\u201d<\/b><span style=\"font-weight: 400;\"> .<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It aims<\/span><b> to achieve the target of a 55% reduction <\/b><span style=\"font-weight: 400;\">in greenhouse gas (GHG) emissions by 2030, compared to 1990 levels.<\/span><\/li>\n<\/ul>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.7979%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\">\n<h2><span style=\"font-size: 18pt; color: #000000;\"><b>Pro and Con of CBAM implementation<\/b><\/span><\/h2>\n<h3><span style=\"font-size: 16pt; color: #000000;\"><strong>Pro<\/strong><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Level Playing Field:<\/b><span style=\"font-weight: 400;\"> Prevents carbon leakage, ensuring that EU companies aren&#8217;t disadvantaged by competing with those from countries with less stringent climate policies.<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Incentivizes Climate Action:<\/b><span style=\"font-weight: 400;\"> Encourages non-EU countries to adopt more ambitious emissions reduction targets to avoid tariffs.<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Revenue Generation: <\/b><span style=\"font-weight: 400;\">CBAM can generate revenue for the EU, which can be used to support climate mitigation and adaptation projects.<\/span><\/span><\/li>\n<\/ul>\n<h3><span style=\"font-size: 16pt; color: #000000;\"><strong>Cons<\/strong><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Trade Barriers:<\/b><span style=\"font-weight: 400;\"> May increase trade costs and hinder global trade, particularly for developing countries with less developed climate policies.<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Complexity: <\/b><span style=\"font-weight: 400;\">Implementing CBAM can be administratively complex, requiring accurate tracking of emissions and product life cycles.<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Retaliation: <\/b><span style=\"font-weight: 400;\">Other countries may retaliate with their own carbon border measures, leading to a trade war.<\/span><\/span><\/li>\n<\/ul>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Importers will be required to surrender annually the corresponding number of CBAM certificates.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Applicability:<\/b><span style=\"font-weight: 400;\"> Applied to the actual declared carbon content embedded in the goods imported to the EU.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>EU\u2019s Emission Trading System (ETS):<\/b><span style=\"font-weight: 400;\"> EU\u2019s Carbon Border Tax is intended to work like the EU-ETS, which sets a cap on the amount of GHG emissions permitted.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Importers will need to acquire these certificates at prices reflecting the carbon cost, incentivizing cleaner production practices globally.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/store.pw.live\/govt-entrance-exams\/upsc-books?utm_source=SEO&#038;utm_medium=PW+Live&#038;utm_campaign=UPSC+CSE+Books\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Check Out UPSC CSE Books From PW Store<\/span><\/a><\/span><\/p>\n<h3><span style=\"font-size: 16pt;\"><b>Implications of CBAM<\/b><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Adverse Impact: <\/b><span style=\"font-weight: 400;\">India is among the top 8 countries that will be adversely affected by the CBAM.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Few of its core sectors such as steel will be greatly affected by the CBAM.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>India exports 27%<\/b><span style=\"font-weight: 400;\"> of its iron, steel, and aluminium products worth $8.2 billion to the EU<\/span><\/li>\n<\/ul>\n<\/li>\n<li><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-136809 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/103-6707d7419f8ce.webp\" alt=\"Carbon Tax\" width=\"350\" height=\"292\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/103-6707d7419f8ce.webp 641w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/10\/103-6707d7419f8ce-300x250.webp 300w\" sizes=\"(max-width: 350px) 100vw, 350px\" \/><b>Costlier Export: <\/b><span style=\"font-weight: 400;\">The EU carbon tariffs could raise costs of Indian exports by 20% to 35%, particularly affecting iron, steel, and aluminium.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Complex process <\/b><span style=\"font-weight: 400;\">: Indian exporters are concerned about the burdensome requirements of the CBAM, which involve submitting nearly <\/span><b>1,000 data points<\/b><span style=\"font-weight: 400;\"> regarding production methods.<\/span><\/li>\n<li><b>Other regulations<\/b><span style=\"font-weight: 400;\">: <\/span><b>EU\u2019s Deforestation Regulation<\/b><span style=\"font-weight: 400;\">, could disrupt supply chains and increase transition costs for compliant countries.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The EU has proposed delaying the implementation of the Deforestation Regulation by one year due to pushback from several countries.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>India\u2019s Commitment to Green Transition<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India is advancing its green transition through initiatives like the <\/span><b>Production Linked Incentive (PLI)<\/b><span style=\"font-weight: 400;\"> scheme for emerging sectors, including green energy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government is committed to meeting its <\/span><b>2070 climate targets<\/b><span style=\"font-weight: 400;\">, with interim milestones set for 2030.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There are ongoing efforts to explore new <\/span><b>blended finance<\/b><span style=\"font-weight: 400;\"> options to support funding for green projects, fostering a conducive environment for sustainable investments.<\/span><\/li>\n<\/ul>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 100.043%;\">\n<tbody>\n<tr>\n<td style=\"width: 130.811%; text-align: center; border-style: solid; border-color: 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\u2018arbitrary\u2019<\/p>\n","protected":false},"author":11,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2089],"subject":[2100],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/136837"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/current-affairs"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=136837"}],"version-history":[{"count":2,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/136837\/revisions"}],"predecessor-version":[{"id":136839,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/136837\/revisions\/136839"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=136837"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=136837"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=136837"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=136837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}