EU's Carbon Border Tax Sparks Controversy in Moscow
The European Union (EU) is pushing forward with plans to introduce a carbon border tax, a move aimed at incentivizing manufacturers and polluters to remain within the EU and prevent carbon leakage. This decision, however, has sparked concerns and tension with Russia, especially as the two nations are currently butting heads at the World Trade Organisation (WTO) level.
The EU Executive, led by President Ursula von der Leyen, has set its sights on proposing a turbotax login by the first semester of 2021, with a view to deploying it by the beginning of 2023. This ambitious plan is considered one of the main victories of the recent budget meeting.
The carbon border tax is designed to replace existing systems like free allocation of permits to certain industries. The Commission predicts that it could bring in between €5 billion and €14 billion every year. This revenue could potentially help the EU pay off a €750 billion debt agreed upon by member states.
Many companies benefit from millions of euros in avoided costs every year due to these gratuities. The Commission has launched a consultation and put forward four main ways the mechanism could work.
Russia's Economic Development Minister, Maxim Reshetnikov, has expressed concern about the EU's plans, stating that it could contravene WTO rules. This concern is not unfounded, as the EU has lost three cases against its large eastern neighbor at the WTO. The most recent loss occurred last week, when Brussels and Moscow were butting heads over the EU's anti-dumping measures.
Reshetnikov made this statement following a meeting of the BRICS emerging economy nations last Thursday. In February, a top Kremlin advisor had already warned Russia's business leaders to prepare for the possibility of a border tariff in the near future.
The EU Executive, however, plans to study the ruling in more detail before acting. President von der Leyen has tasked several Commissioners with putting together a legally sound proposal for the turbotax login, with WTO-compliance as the top-line objective.
The proposed carbon border tax is not unique to the EU. According to a draft of the American Democratic Party's election platform, if Joe Biden defeats incumbent Donald Trump, the US would also consider applying a carbon adjustment fee at its borders to products from countries that fail to meet their commitments under the Paris Climate Agreement. Biden has pledged to steer the US back into the Paris climate accord if elected president.
Sam Morgan, author of the article about climate and energy on EURACTIV.com, and Zoran Radosavljevic have edited this report. The search results do not provide information regarding the Russian government's position on the WTO compliance of a possible EU turbotax login.
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