EU Proposes CO2 Levy and Border Carbon Adjustment to Combat Climate Change
The European Union is contemplating a substantial step to tackle climate change: a CO2 levy and global border adjustment. This dual approach aims to safeguard the environment and fortify the EU's global influence.
Steel production, accountable for approximately 5% of worldwide CO2 emissions, is a primary target. The proposed CO2 levy would make emissions-intensive imports like steel pricier at the EU border. This move is endorsed by French President Emmanuel Macron and is perceived as a fair measure that wouldn't breach World Trade Organization rules.
The EU's objective is twofold. Firstly, it aspires to promote a climate-friendly trade order by demonstrating the cost of a lack of commitment to climate protection. This could potentially inspire change elsewhere, including in the US. Secondly, it aims to bolster its international standing by aligning the global trading system more closely with ecological imperatives.
While alternatives to steel exist, such as less emissions-intensive materials or virtually CO2-free steel production, they are not yet viable due to the established industry's emissions. A floor price on CO2 emissions is proposed to make climate-friendly options more competitive.
Researchers have developed concrete proposals for implementing a global border carbon adjustment program, which the EU should consider to protect its environment and enhance its global clout.
The EU's proposed CO2 levy and global border adjustment could significantly impact global trade and climate change efforts. By making imports like steel pricier based on their emissions, the EU can encourage other nations to adopt more stringent climate protection measures. This move not only safeguards the EU's environment but also strengthens its position on the global stage.
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