• UGI USER
  • Sep 03, 2024
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INDIA PREPARES COP29 STRATEGY AMID EU CARBON TAX

Why in the news?

India is finalising its strategy for COP29, to be held in Baku, Azerbaijan, in November 2024, addressing climate finance, EU’s carbon tax, and representing the Global South, as the upcoming conference in Baku holds significant global and national importance.

source:gtri

EU Carbon Tax and India’s Response:

  • The European Union plans to impose a 25% tariff on energy-intensive goods like iron, steel, cement, fertilisers, and aluminium starting January 2026 under the Carbon Border Adjustment Mechanism (CBAM).
  • India’s environment minister, Bhupender Yadav, indicated that India might consider retaliatory tariffs on EU exports, potentially affecting $8 billion in Indian metal exports.
  • The impact of the CBAM on India’s economy is estimated at 0.05% of GDP, and India’s stance will focus on protecting the interests of developing countries.
What is the EU’s Carbon Border Adjustment Mechanism (CBAM)?

  • Part of EU’s “Fit for 55” Initiative: Aims to reduce greenhouse gas emissions by 55% by 2030 compared to 1990 levels.
  • Carbon Pricing: Imposes a fair price on carbon emissions for specific goods imported into the EU.
  • Environmental Goals: Encourages cleaner production outside the EU and prevents carbon leakage by extending carbon pricing to imports.
  • European Green Deal: CBAM helps maintain EU competitiveness by applying import duties on carbon-intensive industries from non-EU countries.

Key Facts about  COP 29:

Azerbaijan to Host COP 29:

  • Will build on COP 28’s agenda for a net-zero transition by 2050.
  • Aims to reach consensus on limiting global temperature rise to 1.5°C.
  • Focus on the unfulfilled $100 billion annual climate finance commitment.

Truce Proposal for Climate Unity:

  • Azerbaijan proposes a two-week COP truce to mitigate geopolitical tensions.
  • Inspired by the Olympic truce to foster global collaboration on climate action.

Challenges in Achieving Net Zero:

  • Developing countries face capacity and financial awareness issues in preparing NDCs.
  • Azerbaijan targets carbon neutrality by 2050, needing more support and awareness.
  • NDCs are key to reducing emissions and meeting the 1.5°C goal.