{"id":42477,"date":"2020-09-17T16:33:09","date_gmt":"2020-09-17T15:33:09","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=42477"},"modified":"2020-09-18T09:55:00","modified_gmt":"2020-09-18T08:55:00","slug":"imf-endorses-eu-plan-put-carbon-price-imports","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2020\/09\/17\/imf-endorses-eu-plan-put-carbon-price-imports\/","title":{"rendered":"IMF endorses EU plan to put a carbon price on imports"},"content":{"rendered":"<p><strong>The International Monetary Fund (IMF) has endorsed an EU proposal to impose carbon levies on imports, if other major polluters do not sign up to a minimum carbon price.<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">EU Commission president Ursula von der Leyen has presented a carbon border tax as an important tool <\/span><a href=\"https:\/\/www.euractiv.com\/section\/energy\/news\/eu-carbon-border-tax-how-a-french-idea-ended-up-in-the-limelight\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">\u201cto ensure that EU companies can compete on a level playing field\u201d<\/span><\/a><span style=\"font-weight: 400;\"> with big emitters such as China and the USA. This week von der Leyen announced that the <\/span><a href=\"https:\/\/www.climatechangenews.com\/2020\/09\/15\/eu-faces-internal-battle-prepares-increase-2030-climate-target\/\"><span style=\"font-weight: 400;\">EU would raise its <\/span><span style=\"font-weight: 400;\">emissions reduction target<\/span><\/a><span style=\"font-weight: 400;\"> to at least 55% compared to 1990 levels \u2013 up from 40% currently \u2013 by 2030.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The main reason for introducing a carbon border tax is to <\/span><span style=\"font-weight: 400;\">prevent carbon-intensive production from relocating to countries with lower emissions standards, a problem known as \u201ccarbon leakage.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">IMF president <\/span><span style=\"font-weight: 400;\">Kristalina Georgieva on Wednesday called on major emitters to cooperate and draw up a carbon pricing agreement. <\/span><span style=\"font-weight: 400;\">\u201cThe EU cannot stop global warming on its own. But it can bring the world together. A top priority should be an agreement on a carbon pricing floor among major emitting countries,\u201d <\/span><span style=\"font-weight: 400;\">Georgieva said <\/span><a href=\"https:\/\/www.imf.org\/en\/News\/Articles\/2020\/09\/16\/sp091620-friends-of-europe-md-opening-remarks\"><span style=\"font-weight: 400;\">in a statement<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Georgieva said that in the absence of such an agreement, applying the same carbon price on the same products, irrespective of where they are produced, could help avoid carbon leakage and ensure fairness towards European businesses.<\/span><\/p>\n<p>An <a href=\"https:\/\/www.imf.org\/en\/Publications\/Departmental-Papers-Policy-Papers\/Issues\/2020\/09\/16\/EU-Climate-Mitigation-Policy-49639\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">EU climate mitigation policy<\/span><\/a> published by the fund elaborated on the position: <span style=\"font-weight: 400;\">\u201cA carbon border adjustment mechanism could complement the package to avoid an increase in emissions outside the EU due to higher carbon prices in the EU.\u201d<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Climate news in your inbox?<\/span><b> Sign up <\/b><a href=\"https:\/\/www.climatechangenews.com\/newsletter-sign-up\/\"><b>here<\/b><\/a><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Susanne Droege, senior fellow at the German Institute for International and Security Affairs, told Climate Home it was significant the IMF had publicly endorsed the EU\u2019s plan to introduce a mechanism to avoid carbon leakage at the bloc\u2019s border. \u201cCarbon border tax is a potential option on how to implement that mechanism,\u201d she said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Harro van Asselt, professor of climate law and policy at the University of Eastern Finland, said several options remain open for how that carbon price could be applied.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWhat seems most likely is that it will be in the form of<\/span><span style=\"font-weight: 400;\"> a charge similar to the EU emissions trading system (ETS) allowance price for a limited set of sectors, for example cement and electricity, with importers being required to draw from a separate pool of allowances,\u201d he said.\u00a0<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2019\/07\/22\/von-der-leyen-make-carbon-border-tax-work\/\"><strong>Comment:<\/strong> How von der Leyen could make a carbon border tax work<\/a><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Russia\u2019s economic development minister said in July that an EU carbon border tax would <\/span><a href=\"https:\/\/www.climatechangenews.com\/2020\/07\/28\/russia-warns-eu-carbon-border-tax-plan-citing-wto-rules\/\"><span style=\"font-weight: 400;\">contravene <\/span><span style=\"font-weight: 400;\">World Trade Organisation (WTO) rules<\/span><\/a><span style=\"font-weight: 400;\">. China and the US have also clearly stated their opposition and asked the WTO to make the EU clarify its plans, according to Droege.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is critical that the bloc\u2019s efforts to design the policy go hand-in-hand with diplomatic efforts to reassure major trade partners. \u201cOtherwise there is the real risk of retaliation,\u201d said van Asselt. The EU learned the hard way when it tried to impose the ETS on international aviation in 2012 and was forced to limit the scope to intra-EU flights only following strong international and industry backlash.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Joe Biden has said that if he is elected US president in November, <\/span><a href=\"https:\/\/joebiden.com\/climate-plan\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">he may introduce a US carbon border tax<\/span><\/a><span style=\"font-weight: 400;\"> \u201con carbon-intensive goods from countries that are failing to meet their climate and environmental obligations.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"If major emitters do not agree to a minimum carbon price, IMF chief Kristalina Georgieva said the EU was right to impose tariffs on imports at the 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