EU import charges on carbon-intensive products expected to have limited impact: ADB
![Limited impact: EU import tariffs on carbon-intensive goods, says ADB](https://sustainabilityeconomicsnews.com/wp-content/uploads/2024/02/chemical-plant-2023-11-27-05-01-27-utc-scaled.jpg)
According to research by the Asian Development Bank (ADB), the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) is projected to have only a modest negative effect on economies in Asia and the Pacific while offering limited benefits in curbing climate change.
The CBAM, set to be implemented in 2026, will impose import charges on carbon-intensive products like steel and cement to mitigate “carbon leakage” caused by production relocation to regions with lax regulations.
Statistical modeling suggests that CBAM may reduce global carbon emissions by less than 0.2% relative to an emissions trading scheme with a carbon price of 100 euros per metric ton. Additionally, it could decrease global exports to the EU by around 0.4% and Asia’s exports to the EU by approximately 1.1%.
The report highlights the necessity of extending carbon pricing initiatives beyond the EU, especially to Asia, to combat climate change effectively.
It also recommends measures to decarbonize international trade and global value chains, emphasizing the importance of global cooperation in developing universally accepted accounting frameworks for tracking emissions.
Despite concerns about global value chain fragmentation, the report finds that such chains in Asia have recovered well post-COVID-19, with no clear trend towards reshoring.
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