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🗞️ Driving the news: The Asian Development Bank (ADB) has critiqued the European Union's Carbon Border Adjustment Mechanism (CBAM), suggesting it may harm developing Asian nations without significantly reducing global greenhouse gas emissions
• The CBAM aims to prevent carbon leakage by imposing tariffs on high-carbon imports to the EU, making foreign suppliers pay a similar carbon price to domestic ones
🔭 The context: Introduced to combat carbon leakage and ensure fair competition, CBAM applies only to six sectors and is a part of the EU's broader emissions trading scheme
• However, ADB argues that the mechanism could reduce Asian exports to the EU, particularly affecting steel exports from India, and suggests that sharing emission reduction technology would be more beneficial
🌍 Why it matters for the planet: The report warns that any minor emissions reductions from CBAM could be negated by the continued increase in carbon-intensive production across Asia. It emphasizes the need for a global shift in production techniques to truly mitigate climate change
⏭️ What's next: The CBAM is expected to generate around 14 billion euros by 2030, which could be used to help developing countries decarbonize their manufacturing sectors. The mechanism also aims to encourage non-EU countries to adopt stricter climate policies by reducing the levy for nations that have already applied a carbon price on exported goods
💬 One quote: "The way the scale of production is increasing, even if we do this carbon pricing more broadly across the globe, you're still going to see rising emissions unless we see a fundamental change in production techniques," - Neil Foster-McGregor, ADB's senior economist
📈 One stat: CBAM could raise about 14 billion euros ($15.2 billion) in revenue by 2030
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