The EU's import carbon tax policy cannot be seen as just as it exports a disproportionate level of tax to exporting developing economies in a bid to cater to the sensitivities of European consumers of goods.
This is according to a senior visiting research fellow at the Oxford Institute for Energy Studies and founding MD of Eurasia Analytics, Gulmira Rzayeva. She spoke to TimesLIVE Premium this week ahead of the Congress of Parties meeting in Baku, Azerbaijan.
The EU's Carbon Border Adjustment Mechanism (CBAM), coming in 2026, proposes carbon taxes on carbon-intensive imports to achieve carbon neutrality by 2050.
Rzayeva, who is from Azerbaijan, said for Europe to become net zero by 2050, it needed policies such as CBAM and trading schemes as practical instruments for the Fit For 55 document, COP Paris Agreement and EU Methane Emissions Strategy.
“We can hardly call these instruments of the EU just because, literally, what CBAM means is when EU is importing goods from developing countries including South Africa, it imposes taxes on these goods ... to initiate and incentivise companies and countries from the developing world to initiate similar programmes in their own countries, to tax carbon in their own countries.
“The EU in some ways is trying to impose their taxes for carbon emissions on the developing countries. And the reaction coming from the developing countries is that ‘you’ve been responsible, historically, for emissions for climate change. It’s you who should pay for carbon emissions and it’s these countries who should pay taxes for carbon emissions’.”
Rzayeva was speaking to TimesLIVE on the sidelines of last week's Abu Dhabi International Petroleum Exhibition and Conference and ahead of the Congress of Parties climate meeting in her home country of Azerbaijan.
South Africa is challenging the CBAM policy before the World Trade Organization through the department of trade, industry and competition and has lobbied Brics Plus countries to challenge the CBAM on a multilateral level.
She said as more countries in the global north mull their versions of CBAM policies, it would be inconsistent to put a disproportionate burden on the developing world to decarbonise when the global north has not provided proportional funding to that end.
“You can’t approach all the countries in the world in the same way. There are countries that are suffering from climate change, facing a lot of consequences of climate change, and still, they haven’t got any finance for adaptation because adaptation has not been prioritised in the same way as mitigation in all of these meetings and conferences.
It would be fair not to treat all of the countries in the same way, because if there is a tax imposed on imported goods, then this should be implemented towards the developed countries to make them indirectly pay for emissions that they have historically been causing to the entire planet
— Visiting research fellow Gulmira Rzayeva
“It would be fair not to treat all of the countries in the same way, because if there is a tax imposed on imported goods, then this should be implemented towards the developed countries to make them indirectly pay for emissions that they have historically been causing to the entire planet.”
She was optimistic that this week’s COP meeting would present an opportunity for global leaders to give adaptation finance equal prominence to mitigation in decarbonisation.
Only $100bn has been contributed by the global north in the mitigation fund, which is just a drop in the ocean because what is needed is $1-trillion a year, she added.
Senior vice-president of the Environmental Defence Fund Mark Brownstein said emerging markets should take a leaf out of Namibia’s book as its Green Hydrogen Conference in September showed the country was gearing up to invest in green hydrogen for itself and the EU.
He said while CBAM presented a challenge to emerging economy exports, it also presented an opportunity to accelerate decarbonisation.
“You can sort of think of it on one hand as a consumer preference, if you will. The consumer economy of Europe is saying, ‘We want cleaner energy, we want cleaner products’, and on the other hand, I totally understand from the perspective of other countries outside Europe seeing this is an obstacle to providing goods and services to the union.
“On the other hand, I was in Namibia in the beginning of September for a green hydrogen conference ... A country that is gearing up to put major investment within the development of green hydrogen ... I tend to look at these challenges as opportunities for those who are ready, willing, and able to invest in them,” Brownstein said.
“That is one example of a country that’s responding to the CBAM challenge, by stepping up and being a supplier of choice into a new market and, in doing so, creating local economic development that will develop the whole of the country.”
Speaking on the sidelines of parliament last week, deputy minister of trade industry and competition Zuko Godlimpi said South Africa needed to do more to leverage its domestic production of goods such as steel and use tariffs to protect vulnerable local industries.
“We impose a 10% import tariff on steel. Some other countries impose as high as 25%. The US sits at about 25%, others at 17% ... to discourage the entry of steel from outside, to give a lifeline to their domestic steel sectors. This is where the discussion around renegotiating some of our economic partnership agreements comes into the equation.”
Andrew Whitfield, who shares the deputy minister portfolio with Godlimpi, said South Africa needed to look into the future and not plan re-industrialisation by “looking backwards”.
“One of the items ... is the green hydrogen commercialisation strategy and related items of the green economy and green industrialisation. I think if we look at that ... and some of the work that has been done in the development of the decarbonisation value chain, how that can support the steel industry and components manufacturing for renewable energy equipment ... is the discussion we are having within the department.”
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