EU’s trade-focused climate policy seen as ‘new tariff barrier’ in China economic circles
- The European Union’s new Carbon Border Adjustment Mechanism will make it more expensive for trade partners with higher levels of emissions, including China
- Critics of the attempts to curb polluting emissions with a carbon tax contend that it serves to unfairly penalise developing countries
Taking a shot at the architects behind the European Union’s new climate policy, a Chinese central banker says the bloc’s Carbon Border Adjustment Mechanism (CBAM) functions as a “new tariff barrier” that violates economic principles.
The CBAM, which will enter into effect in October, is designed to prevent “carbon leakage”, where carbon-intensive imports from countries with less stringent climate policies outcompete domestic production.
Under the new rules, importers in the EU would have to pay the price difference between the carbon emission price paid in the country of origin and that of domestic production in the EU.
“If Europe imposes taxes based on the [carbon] price differences on relevant products from China, it may have a very large impact on China’s related industries and enterprises,” Zhou Chengjun, director of the Financial Research Institute of the People’s Bank of China, said at an academic forum in Beijing on Saturday, according to Chinese media outlet thePaper.cn.
The news site reported that Zhou likened the CBAM to a “new tariff barrier” that will have a detrimental impact on globalisation efforts.
