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EU countries agree world's first carbon border tariff

  • Posted By
    10Pointer
  • Categories
    Environment
  • Published
    19th Mar, 2022

Context

The EU's 27 economy ministers have agreed to introduce a carbon levy on imports of highly-polluting goods like steel, cement and fertilisers. 

Background

  • The carbon border adjustment mechanism (CBAM) was proposed by the European Commission last year as a way to protect EU industry from imports of products coming from countries where it is cheaper to pollute.
  • This will be particularly important as the bloc works towards its 2030 and 2050 climate goals. 

What is a carbon border adjustment tax?

  • A 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.
  • As a trade-related measure, it affects production and exports.

Why CO2 emission is dangerous?

  • The amount of carbon emissions trapped in atmosphere causes global warming, which causes climate change, which leads to:
    • melting of the polar ice caps
    • the rising of sea levels
    • the disturbance of animals’ natural habitats
    • extreme weather events

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