Tuesday, 18 January 2022

European Green Deal: The Carbon Border Adjustment Mechanism and implications for South African and European Union trade

  • Year: 2021
  • Author(s): Lerato Monaisa

The Carbon Border Adjustment Mechanism (CBAM) is a headline policy initiative of the European Green Deal. One of the drivers of the CBAM is that carbon emissions should have a price, and the CBAM is intended to “align the carbon price on imports with that applicable within the EU”. This policy brief provides an initial assessment of the CBAM and its implications for the global economy and South Africa-EU trade. South Africa’s trade with the EU will be greatly affected by the CBAM and other EU climate regulations. The South African government and exporters to the EU need to put in place measures and mechanisms to ensure trade resilience in a low-carbon global economy. These measures must have the just transition at their core to ensure that South Africa’s move to a low-emissions economy is inclusive, just and equitable, and protects communities and workers so they are not adversely affected.

The brief was funded by the Department of Trade, Industry and Competition. It draws on a report by TIPS, Tralac and Trade Advisory on The European Green Deal: Context, challenges and opportunities for South African SMEs operating in the green economy, funded by the European Union and the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU).

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