How to counter EU's carbon border adjustment mechanism at the COPS

As the European Union (EU) sets a commendable example by effectively reducing its CO2-equivalent emissions, the emissions from non-EU countries with less rigorous climate obligations are accused of undermining the EU's climate objectives.

- SUVAJIT BANERJEE SOVINI MONDAL

Consequently, mainstream Western media portrays the Carbon Border Adjustment Mechanism (EU-CBAM) as a fair pricing strategy for carbon emissions, thereby positioning the EU as a leader in promoting cleaner production practices in non-EU nations. On the other hand, voices from the Global South incriminate the EU-CBAM as an innovative protectionist instrument, that has crooked the chronic NorthSouth divide in addressing climate obligations, often overshadowing the precautionary, prudent, and pragmatic approaches that developing economies like India advocate for. Around this disputation, the CBAM has successively occupied the centre-stage of discussion in some recent editions of the Conference of the Parties (COP) organized under the UN Framework Convention on Climate Change (UNFCCC).

During COP28, held in Dubai in 2023, representatives from developing economies expressed their concerns regarding the CBAM, highlighting evidence that its economic implications for Africa could be three times the level of aid provided by the EU to the continent. At COP27, convened in Sharm El-Sheikh, Egypt, a statement from Brazil, South Africa, India, and China, collectively known as the BASIC countries, described the CBAM as discriminatory and urged developing nations to present a unified response to what they perceive as an unjust transfer of responsibilities.

The CBAM is scheduled for implementation in its definitive form beginning 1 January 2026. This mechanism is a crucial component of the EU's climate strategy and may present significant risks to international trade in energy-intensive and trade-exposed products. Therefore, consistent with previous COPS, the CBAM is expected to garner substantial attention from stakeholders involved in the ongoing negotiations at COP29, currently taking place in Baku, Azerbaijan, since 11 November 2024.

Discussions will likely feature arguments both supporting and opposing its eventual implementation and rollout.