Veranstaltungsberichte

Perception of the Planned EU Carbon Border Adjustment Mechanism in Asia-Pacific

Presentation of Survey Results

Although global climate action is growing, under the current unconditional commitments made by Parties to the Paris Agreement, global temperatures are predicted to rise by more than 3°C by 2100, far above the goal of 1.5°C. To address climate change and carbon leakage, the European Union plans to introduce a carbon border adjustment mechanism (EU CBAM) that will ensure that the price of imports reflects more accurately the carbon content of the goods. Against this backdrop, KAS RECAP and GlobeScan hosted a public webinar to launch the survey results on the perception of the planned EU CBAM in Asia-Pacific on 6 May 2021.

GlobeScan presented the key findings of the survey which maps the views of experts in Australia, China, India, Indonesia, Japan, Singapore, South Korea and Thailand on the scheme. Interviewees agree that in most countries, knowledge of the EU CBAM is limited and that stakeholders are waiting for details of the mechanism to emerge before focusing on the topic. Developed and likeminded (with regard to climate policy) countries that have high levels of trade with the EU are more likely to know about the mechanism. Perceptions of the EU CBAM are coloured by stakeholders’ previous interactions with the EU on climate measures as well as their ability to adapt to the mechanism, which will be influenced by the country’s own development level and its progression on climate issues.


In the panel discussion, climate and energy experts from Indonesia, Japan and Brussels shared their views and opinions on the scheme and its potential impacts on their respective countries.


In Brussels, there are still many uncertainties in terms of development of the scheme. The CBAM is shaped by various motives of European countries: A classical argument over industrial competitiveness which may not be compatible to the WTO rules; Environmental concerns; Use of the scheme as a foreign policy tool to influence other countries’ climate policy; And addressing carbon leakage. However, there is a risk that if the CBAM fails, there might be an excuse for Europe to reduce carbon emissions’ targets. Thus, more dialogues between countries are necessary to ensure successful design and implementation of the mechanism.


Panelists expressed concerns over limited time for partner countries to adapt to the new scheme. The EU CBAM is increasingly mentioned and discussed in several countries. This drives domestic climate action particularly in the power sector and arouses discussions about low carbon transitions among various stakeholders. The industry is willing to do more in order not to lose the European market. Some energy companies have started their business on renewable energies and can act quicker than the government. It is assumed that the EU has the responsibility to explain the scheme bilaterally and support businesses from other partner countries in response to the new policy.


Experts hold the view that each country has its own carbon pricing approaches and policy mix. However, the EU CBAM is treating all countries the same in the case of implementing the scheme, which may not be fair for some countries. In addition, it imposes compulsory terms related to climate action on trade, which may be contradictory to the voluntary nature of the Paris Agreement. Japan has various domestic carbon pricing measures in place such as fossil fuel tax, feed in tariffs for RE expansion. It is difficult to precisely calculate the carbon price on the industrial goods exported from Japan to the EU. Benchmarking standards and methodologies of the EU and Japan vary largely. Although the mechanism has not been implemented, it does have policy effects on Japan. The Japanese government is accelerating discussions on introducing carbon pricing schemes, aiming to deliver its pledge to achieve carbon neutrality by 2050 as well as to boost economic growth.

 

The survey can be downloaded here: https://www.kas.de/en/web/recap/single-title/-/content/perception-of-the-planned-eu-carbon-border-adjustment-mechanism-in-asia-pacific-an-expert-survey.

Ansprechpartner

Dr. Christian Hübner

Dr

Leiter des Regionalprogramms Energiesicherheit und Klimawandel Asien und Pazifik

christian.huebner@kas.de +852 28822245

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