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The European Union has proposed imposing a tax on “imports of pollution”, especially for the transport of goods from steel to aluminum. However, the world’s first carbon tax might not be so expensive. According to a study by the environmental groups Sandag Climate Campaign and E3G.
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While policies related to polluting industry charges are unwelcome for some countries, the costs involved are relatively small. One of the biggest critics of the tax, according to Bloomberg, is China, for which the introduction of tariffs would mean a net cost of about two percent of iron and steel exports to the EU by 2023 – but its value is around five billion euros.
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The costs will be borne mainly by EU consumers, while importers will recover most of them due to higher prices on EU markets.
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“The impact of the likely carbon offset scenario on Chinese imports into the EU will be very small,” said study authors including Sandag Climate Campaign Director Adriena Assouse.
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“The costs will be borne mainly by EU consumers, while importers will recover most of them due to higher prices in EU markets.”
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The aim of the “carbon curtain” is to prevent companies from simply shifting emissions from the EU to countries with more relaxed emissions regulations. However, the duty has yet to be approved by the Member States and the European Parliament.
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Russia would face the strictest carbon charges at the border. By 2035, imports of iron and steel would cost € 600 million. The proposed measure would least affect the United States, which would incur costs of around € 10 million in 2026 and increase to € 25 million by 2035.
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The EU wants to reduce carbon leakage with the help of carbon tariffs2without violating the rules laid down by the World Trade Organization.
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In July, the EU unveiled the Green Agreement, which sets the continent a plan to reduce carbon emissions by 55 percent by 2030 compared to 1990, and by 2050 Europe should be climate neutral.
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A proposal for a carbon offset mechanism at borders is part of this package. However, it will not do much to reduce greenhouse gas emissions. According to estimates by the German company Bertelsmann Stiftung, it would only lead to an additional reduction in CO2 released into the atmosphere by 0.2 percentage points worldwide.
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Nevertheless, some see the EU plan as a threat that is trying to force other countries to live up to Europe’s climate ambitions.
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