Joe Biden mocked by host for global warming speech
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The EU’s “carbon-border adjustment mechanism” (CBAM) would require importers of energy-intensive goods to pay a price for environmental damage. But The European Council on Foreign Relations (ECFR) has highlighted the flaws in this policy, which they say could lead to African producers selling into other markets with lower standards, which would pose a serious threat to climate action. Under the new levy, companies importing iron, steel, aluminium, fertiliser, cement or electricity into the bloc would have to purchase carbon certificates.
The certificates would reflect the same carbon prices faced by European producers under the EU’s emissions trading system.
France has been a vocal advocate of the proposed levy.
The plan is to prevent European manufacturers from going bust when their international rivals are not subject to equivalent green standards.
In that kind of scenario, emissions are unchanged, in a problem called “carbon leakage”.
While the policy would have an impact on some of the world’s biggest emitters like China and Russia, it would also affect countries like Ukraine and African countries that rely on a small number of industries, according to the ECFR.
The think tank says that Mozambique, Guinea, Sierra Leone, Ghana and Cameroon, who are big exporters of aluminium would be heavily impacted.
Zambia and Zimbabwe, who sell a lot of steel and Algeria and Egypt’s fertiliser exports, would also be affected.
While the ECFR does support the border levy, it argues the EU should redistribute CBAM revenues to low-income countries that are worst-affected as a result.
The researchers said that African states “have limited fiscal headroom and face multiple development and pandemic-related challenges.”
They added: “As such, it is understandable that they perceive CBAM, and the EU’s refusal to grant exemptions to the least developed countries, as a threat.”
They also noted that African exporters don’t have the ability to compete with Europeans on green innovation or research and development.
They said: “These concerns could undermine the EU’s climate leadership, deepen mistrust between the bloc and countries in the global south, and sabotage efforts to achieve the Paris’ Agreement’s 1.5C or even 2C targets.”
Alex Clark, a researcher at the University of Oxford and one of the ECFR report authors, said that while he thought that CBAM was a good idea in theory, the EU needed to provide more measures to help African states secure investment for the green transition.
He said that Africa is “still essentially treated as a charity case”.
He added: “It’s still really just the recipient of adaptation money rather than a genuine effort at economic transformation.
“If Africa’s place in the future global economy is going to be not limited to damage control and allow it to grasp some of the clear opportunities of the green transition, the EU will need to complement CBAM with some serious well-thought-out, broad-based investment.”
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Mr Clark sent a stark warning that a “poorly managed CBAM” could lead to African producers selling into other markets with lower standards, while at the same time it could slow down political progress on the green transition.
He also slammed European Commission President Ursula Von der Leyen for her weak efforts to improve African relations.
He said: “There is a huge trust deficit in bilateral relations between the EU and African states, between EU member states and African states. Perhaps most obviously between the EU and the AU.”
But while there are some major concerns with the CBAM, the report argues that the EU should be playing a leading role in the global path to net zero emissions.
The report says: “The EU is a powerful market economy and export market, a major donor, a regulatory superpower, and an essential source of expertise in intellectual property and infrastructure that can help other powers implement the green transition.
It comes as Prime Minister Boris Johnson is gearing up to host more than 100 world leaders next week.
The COP26 summit, which starts Sunday, is billed by the UK hosts, the EU, UD and other countries as the meeting to “keep 1.5 alive” — to limit global warming to 1.5 degrees Celsius.
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