‘Fossil fuels will still play important role’: BRICS Declaration opposes carbon border tax
2-minute summary
The New Delhi Declaration, adopted at the 18th BRICS Summit, strongly opposed the European Union's Carbon Border Adjustment Mechanism (CBAM), labeling it a unilateral, punitive, and protectionist trade barrier. The declaration asserted that fossil fuels will continue to play an indispensable role in the energy mix of emerging markets and developing economies to ensure national security and socio-economic development. While reaffirming commitments to the Paris Agreement, the bloc emphasized the need for "nationally determined just transitions" and technological neutrality, urging developed nations to provide adequate climate finance and technology transfer. Additionally, the summit welcomed India's International Big Cat Alliance (IBCA) headquartered in New Delhi, supported the Kunming Biodiversity Fund established by China under the Kunming-Montreal Global Biodiversity Framework, and adopted guidelines for Disaster Management Early Warning Data Integration following recent regional climate disasters.
Why it's in the news
The 18th BRICS Summit held in New Delhi adopted a joint declaration that directly challenges the EU's carbon border tax (CBAM) and defends the transition timeline of developing nations by asserting the ongoing importance of fossil fuels.
Background and context
The European Union's Carbon Border Adjustment Mechanism (CBAM) is a landmark tool designed to place a fair price on the carbon emitted during the production of carbon-intensive goods (such as steel, cement, aluminum, and electricity) entering the EU. While the EU frames CBAM as a mechanism to prevent 'carbon leakage' and encourage global industrial decarbonization, developing nations like India, China, and South Africa view it as a trade barrier that violates the core UNFCCC principle of Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC). Developing economies argue that they require a longer transition period and continued reliance on fossil fuels to lift millions out of poverty, making unilateral carbon tariffs highly discriminatory and economically punitive.
Constitutional provisions
- Article 48A — Directive Principles of State Policy (DPSP) directing the State to protect and improve the environment and safeguard forests and wildlife.
- Article 51(c) — Promotion of international peace and security, including fostering respect for treaty obligations and international law in the dealings of organized peoples with one another.
Committees and reports
- Paris Climate Agreement — The legally binding international treaty on climate change, emphasizing nationally determined contributions (NDCs) and the principle of equity.
- Kunming-Montreal Global Biodiversity Framework (KM-GBF) — An international treaty aimed at halting and reversing biodiversity loss, supported by the Kunming Biodiversity Fund.
Government schemes
- International Big Cat Alliance (IBCA) — Launched by India in 2023 with headquarters in New Delhi, aimed at protecting seven major big cat species globally.
International organisations
- BRICS — An influential grouping of major emerging economies (including Brazil, Russia, India, China, and South Africa) acting as a collective voice for the Global South.
- European Union (EU) — The regional bloc implementing the Carbon Border Adjustment Mechanism (CBAM), impacting global trade dynamics.
Previous UPSC questions on this theme
- Prelims GS-1 2016 — The term 'Intended Nationally Determined Contributions' is sometimes seen in the news in the context of (a) pledges made by the European countries to rehabilitate refugees from the war-affected Middle East (b) plan of action outlined by the countries of the world to combat climate change (c) capital contributed by the member countries in the establishment of Asian Infrastructure Investment Bank (d) plan of action outlined by the countries of the world regarding Sustainable Development Goals
Mains practice: The European Union's Carbon Border Adjustment Mechanism (CBAM) has been criticized as a unilateral and protectionist measure by developing nations. In this context, analyze the challenges CBAM poses to India and discuss how India can leverage multilateral platforms like BRICS to safeguard its interests.
The European Union's Carbon Border Adjustment Mechanism (CBAM) aims to levy a carbon tax on carbon-intensive imports. While framed as an environmental policy to prevent carbon leakage, the 18th BRICS New Delhi Declaration has rightly criticized it as a unilateral and protectionist measure that undermines global climate equity.
**Challenges Posed by CBAM to India:**
• **Economic Impact on Key Exports:** India's high-carbon manufacturing sectors, particularly steel, aluminum, and iron ore, face substantial tariffs, reducing their competitiveness in the EU market.
• **Violation of CBDR-RC:** By imposing uniform standards, CBAM ignores the foundational UNFCCC principle of Common But Differentiated Responsibilities and Respective Capabilities, penalizing developing nations with low historical emissions.
• **Capital Diversion:** It diverts financial resources that developing countries could otherwise use for domestic green transitions into paying EU import duties.
• **Compliance and Administrative Costs:** Indian MSMEs face high costs in monitoring, verifying, and reporting carbon emissions to meet stringent EU standards.
**Leveraging BRICS to Safeguard Interests:**
• **Collective Bargaining:** BRICS represents major emerging economies and top coal consumers (India, China, Russia). A unified stance strengthens their negotiating power at the WTO and UNFCCC against unilateral trade-climate measures.
• **Demanding Climate Finance:** BRICS can collectively pressure developed nations to deliver on their unfulfilled commitments of providing adequate, predictable, and accessible climate finance and technology transfer.
• **Promoting Technological Neutrality:** The bloc can advocate for diverse, nationally determined pathways to decarbonization, ensuring that transitional fuels like natural gas and cleaner coal are recognized as valid components of a just transition.
• **South-South Cooperation:** Strengthening intra-BRICS trade and developing alternative green technologies can reduce dependence on Western markets.
In conclusion, while global decarbonization is imperative, unilateral measures like CBAM threaten economic equity. India must utilize platforms like BRICS to champion climate justice, ensuring that the global transition remains orderly, equitable, and inclusive.
Prelims practice questions
Q1. With reference to the International Big Cat Alliance (IBCA), which was highlighted in the 18th BRICS New Delhi Declaration, consider the following statements: 1. It was initiated by India in 2023 and is headquartered in New Delhi. 2. It aims to conserve all eight species of wild big cats globally. 3. Membership is restricted only to countries that have native populations of big cats. Which of the statements given above is/are correct?
- 1 only
- 1 and 2 only
- 2 and 3 only
- 1, 2 and 3
Answer: A. Statement 1 is correct: IBCA was initiated by India in 2023 and its headquarters is based in New Delhi. Statement 2 is incorrect: It seeks to cooperate on the conservation of seven wild cats (tiger, lion, leopard, snow leopard, cheetah, puma, and jaguar), not eight. Statement 3 is incorrect: Membership is open to all interested countries, organizations, and donors, not just range countries.
Q2. The Carbon Border Adjustment Mechanism (CBAM), often opposed by developing nations, is an initiative of which of the following organizations/blocs?
- United Nations Framework Convention on Climate Change (UNFCCC)
- European Union (EU)
- G20
- World Trade Organization (WTO)
Answer: B. The Carbon Border Adjustment Mechanism (CBAM) is a unilateral policy tool introduced by the European Union (EU) to place a carbon price on imports of carbon-intensive goods entering its market.
Q3. With reference to the Kunming-Montreal Global Biodiversity Framework (KM-GBF) mentioned in the BRICS Declaration, consider the following statements: 1. The Kunming Biodiversity Fund was established with financial contributions from China to support developing countries in biodiversity conservation. 2. The framework is legally binding under the World Trade Organization. Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: A. Statement 1 is correct: The Kunming Biodiversity Fund was established with contributions from China to support developing nations in biodiversity conservation. Statement 2 is incorrect: The KM-GBF is an international treaty/framework under the UN Convention on Biological Diversity (CBD), not the World Trade Organization.
Revision flashcards
- What is the primary objective of the EU's Carbon Border Adjustment Mechanism (CBAM)? To prevent 'carbon leakage' by imposing a carbon price on carbon-intensive imports (like steel, cement, aluminum) entering the EU, equalizing the cost with domestic EU products.
- Which seven wild cats are covered under the International Big Cat Alliance (IBCA)? Tiger, lion, leopard, snow leopard, cheetah, puma, and jaguar.
- Where is the headquarters of the International Big Cat Alliance (IBCA) located? New Delhi, India.
- What does the climate negotiation principle 'CBDR-RC' stand for? Common But Differentiated Responsibilities and Respective Capabilities.
- Which country established and contributed to the Kunming Biodiversity Fund under the KM-GBF? China.