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