Opinion | The Butterfly Effect That Is The Carbon Border Adjustment Mechanism |
The recently concluded 30th Conference of Parties (COP30) on climate in Brazil witnessed an intense debate related to the issue of Unilateral Trade Measures (UTM). India has been consistently highlighting this issue across trade and climate platforms, and finally managed to elevate this debate at COP30, with this being one of the key issues discussed at the annual climate event, even if it was not on the formal agenda. The opinions between the developing and the developed world are deeply divided.
The EU climate chief argued at COP30 that he “would not be lured into the suggestion" that the Carbon Border Adjustment Mechanism (CBAM) is aimed at restricting trade. CBAM applies a carbon cost to imports such as steel, aluminum, cement, fertilisers, and electricity, based on the carbon emissions generated during their production.
The EU, and most in the developed world, want to present CBAM within the framework of a ‘supportive and international economic system’ that should be discussed at an annual high-level summit convened by the UNSG, while the developing world wants to frame the issue as a ‘unilateral trade measure’ with a dedicated platform to discuss the same. However, does the position taken by Indian negotiators........