Rich countries vote to raise more money by taxing carbon emitting goods

Jun 24, 2022 News

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…Oxfam says rich countries passing the buck to countries least responsible for climate crisis

Kaieteur News – With Guyana and other poor oil producing nations being encouraged to step up to fill the slack left from Europe’s fallout with Russia over its invasion of Ukraine, the country would now have to take into consideration an additional expense when selling its crude.
The European Parliament on Wednesday voted on its position to implement a carbon border tariff for companies exporting to the European Union (EU). French Minister for Economic Affairs, Finance and Recovery Bruno Le Maire had said, that the agreement in the Council on the Carbon Border Adjustment Mechanism (CBAM) is a victory for European climate policy, and that it provides a tool to speed up the decarbonisation of the industry, while protecting itself from companies with less ambitious climate goals. In reforming the EU’s Emissions Trading System (ETS), it promotes “a well-established scheme that sets a price for the greenhouse gas emissions released by the most energy-intensive industries.”
Oxfam’s EU Tax expert, Chiara Putaturo has noted however, that forcing the poorest countries to pay this tariff is unfair. He said that, “Europeans are responsible for double the carbon emissions as those in the poorest half of the world since 1990. This decision allows rich countries to pass the buck to those least responsible for the climate crisis.” Already, the Oxfam expert noted that, the failure of rich countries to meet their commitments for climate finance is costing countries tackling the climate crisis tens of billions of dollars. As such, the EU must increase climate finance funds if poor countries are going to bear the cost of the carbon tariff. “EU countries must now accept the European Parliament’s proposal and support a fair green transition that mandates the real polluters pay for the pollution,” Putaturo insisted.
It was related that the European Parliament’s vote proposes to put CBAM revenue towards the EU’s budget and increase climate finance funds for least developed countries (LDCs) by the same amount as the CBAM revenues. The vote wants a quicker phase-out of ETS (EU Emission Trading System) free allowances, from 2027 to 2032 instead of the Commission’s earlier proposal of 2026 to 2036; and there is no exemption for the poorest countries.
Oxfam recommended however, that these rich countries channel CBAM revenues into additional climate finance for poor countries as well as providing an exclusion or exemption period for LDCs, while it speeds up the phasing out of free allowances in the ETS market. Oxfam said that in July 2021, the European Commission tabled the CBAM as part of its climate package. The proposal applies a tariff (buying a CBAM certificate) to companies from certain sectors importing into the EU. This tariff reflects the carbon emissions of their imported goods and applies only if countries have lower carbon pricing than Europe. Least developed countries are not exempt from this tariff. The European Commission proposed that most revenue from the CBAM will go to the EU’s budget to repay the recovery instrument Next Generation EU. In March 2022, EU countries reached a general agreement on the CBAM. This agreement mirrored the European Commission’s proposal.
Oxfam calculated however that between 1990 and 2015, the EU was collectively responsible for 15 percent of global cumulative consumption emissions while being home to just 7 percent of the world’s population. The poorest 50 percent of the world’s population, located mostly in poor countries, were responsible for just 7 percent of cumulative emissions.
In 2009, rich countries pledged to increase climate finance for poorer countries to 100 billion dollars a year by 2020. At the Paris climate summit in 2015 (COP21), this goal was extended to last through to 2025. Rich countries failed to reach the promised level by 2020 and are now planning to reach it by 2023, meaning that climate vulnerable countries have missed out on several tens of billions of dollars originally promised to them.
Guyana is among several countries encouraged to benefit from the sanctions placed on Russia by making its crude available to cushion the oil shortage in Europe. In April, Guyana’s crude made a rare trip to Europe, “potentially spurred by global market participants seeking alternative supplies to Russian oil.” Exxon had placed the Suezmax tanker Homeric to travel from Guyana to Europe on April 3, with a cargo of non-heated crude. Outside of this, it had been accepted globally that to keep the world within a safe temperature, rich countries must end oil and gas production by 2034, while poor countries must do so by 2050.

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