EU’s wicked carbon border tax will reduce Africa economies by $25 billion per year

European Union’s Carbon Border Adjustment Mechanism (CBAM) is to measure and encourage countries where they import to adopt cleaner production. CBAM came into effect on a transitional basis in October introducing a carbon tax on exports to the EU.

But the measure has raised concerns in Africa, which sees Europe as its main export market.

A study by the Africa Climate Fund and the London School of Economics found that the economic impact of CBAM would be “profound” and most strongly felt in Africa.

Their modeling based on 87 euros per tons shows that CBAM will cause a loss of about $25 billion based on 2021 GDP levels, almost four times what the EU gave Africa to develop in the first half of the year. year 2021.

Products such as iron and steel, cement, aluminum, fertilizers, hydrogen and electricity, which account for a large part of Africa’s exports to Europe, will be the first victims of this mechanism.

After 2026, CBAM’s scope will expand to other products, which could lead to greater economic losses.
Experts say the measure is punitive and significantly reduces the space for developing countries to achieve growth and create jobs.

Our guest this week is Faten Aggad, Senior Advisor for Geopolitics and Climate Diplomacy at the Africa Climate Organization.

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