2024-05-06 14:16:47
The EU’s Carbon Border Adjustment Mechanism (CBAM) will have an impact on CAREC countries.
As Day.Az reports on Thursday with reference to Trend, this was said by ADB Director General for Central and West Asia Evgeniy Zhukov, speaking at a panel discussion on the topic “Financing more environmentally friendly value chains in the CAREC region (Central Asia Regional Economic Cooperation Program) within the framework of the ADB annual meeting in Tbilisi.
The CBAM is currently in a transition phase (October 2023 – December 2025) and will be extended to all sectors covered by the emissions trading system in 2026.
The EU will impose import tariffs on carbon-intensive products, cement and electricity, based on the carbon dioxide emissions produced during their production.
CBAM aims to harmonize global carbon prices and accelerate emissions reductions around the world, reducing carbon leakage.
“This could have a significant impact on the economies of CAREC supplying countries with a higher share of carbon-intensive exports to Europe, especially Central and West Asia. Carbon pricing policies are in place in nearly 40 jurisdictions. The CAREC region will be affected by CBAM. In one scenario, China would make significant reducing CO2 emissions and will contribute to global reductions,” he said.
Zhukov noted that CBAM in both EU and OECD countries without carbon pricing in CAREC would lead to increased emissions in all CAREC countries due to possible carbon leakage and refining production moving to CAREC countries.
“For CAREC countries with high CO2 emission intensity in extractive sectors, CBAM could pose a problem. CBAM could lead to significant declines in CAREC countries’ exports and industrial production in sectors covered by CBAM,” he noted.
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