European Roundtable on Climate Change and Sustainable Transition and Council on Energy, Environment and Water announce cooperation on Border Carbon Adjustments.
BRUSSELS, NEW DELHI (May 12th, 2020) – The European Roundtable on Climate Change and Sustainable Transition (ERCST) and the Council on Energy, Environment and Water (CEEW) of India are pleased to announce their collaboration in examining the role that Border Carbon Adjustments (BCAs) may play in addressing asymmetry in climate ambition under the Paris Agreement, with special focus on the plans that the European Union has to examine this option. In this context, ERCST & CEEW will hold a virtual India-EU “town hall meeting” on June 25th, 2020. This activity together with other similar planned “town hall” meetings will feed into a policy paper on the international views on BCA that ERCST will publish in collaboration with its partners.
The European Green Deal has strengthened the level of climate ambition, increasing the asymmetry of climate efforts by aiming to achieve climate neutrality in the European Union by 2050. This raises the question of how to deal with competitive pressure and carbon leakage, pushing BCAs to the front as a possible solution.
Meanwhile, emerging economies like India are leapfrogging towards an energy transition by building renewable energy capacity, investing in sustainable mobility, sustainable cooling, industrial energy efficiency and fuel choices, and sustainable agriculture. However, the question that remains to be answered is how these measures would be accounted for and valued in any decisions regarding BCAs. The discussion will explore ways to accommodate concerns and initiatives among major trading partners in the global architectures of trade and climate change.
Border carbon adjustments (BCAs) aim to alleviate negative effects caused by uneven climate policies by including imports and/or exempting exports. BCAs seek to level the playing field in competitive markets, incentivize trade partners to strengthen their own climate efforts and prevent leakage of carbon emissions to jurisdictions with weaker policies. These objectives can be achieved by a tariff or other fiscal measure applied to imported goods, the extension of regulatory compliance obligations (e.g. ETS) to imports or a tax exemption or regulatory relief for exports.
Chief Executive Officer of CEEW, Dr Arunabha Ghosh said, “The world is on track for at least 3.3°C of warming above pre-industrial levels, in contrast to the Paris Agreement target of restricting warming to well below 2°C. The need of the hour is to build trust and transparency to ensure that ambitions are being translated into action. This will not be possible without innovative fiscal and market instruments. However, as emerging economies experiment with clean energy, clean transportation and industrial decarbonization, we need to ensure that these efforts are also accounted for and restrictive trade practices are avoided.”
Andrei Marcu, Executive Director of ERCST emphasized that “the BCA, its design and impacts on trade and international cooperation need to be well understood, since it will become increasingly urgent to address the effects of asymmetrical climate change policies and BCAs are presented as a serious option. As think tanks, we will cooperate with colleagues in other countries in this effort”
CEEW is one of Asia’s a leading not-for-profit policy research institutions. The Council uses data, integrated analysis and strategic outreach to explain – and change – the use, reuse and misuse of resources. It prides itself on the independence of its high-quality research, develops partnerships with public and private institutions, and engages with wider public. In 2020, CEEW once again featured extensively across nine categories in the ‘2019 Global Go To Think Tank Index Report’. The Council has also been consistently ranked among the world’s top climate change think tanks.
ERCST provides for a space for policy-makers, regulators and stakeholders to discuss climate change policy and the transition to a low GHG-economy in a sustainable way, with a focus on European climate policy but keeping in mind the global dimension of climate change policy. The experience and research input of its staff and of the stakeholders joining its activities allow the ERCST to make an intellectual analysis contributing to the European and international debates on climate change policy. Continuing its work on carbon leakage protection, the ERCST is analyzing issues and options of designing BCAs in practice and discussing coherent ‘policy packages’ that could be implemented at the EU level in 2020.
Ms. Indira Vlaminck