‘Unfair’ EU carbon tariff could spur Asia to develop separate pricing schemes: ADB chief economist

AN UPCOMING tariff on carbon-intensive imports into the European Union (EU) is potentially “unfair” for Asian exporters, given the region’s role as a global manufacturing hub, Asia Development Bank’s (ADB) chief economist Albert Park said in an interview with The Business Times (BT).

“If you were very critical, then you could say this is just a way to protect European industry,” said Dr Park. “And they are picking industries where they feel a competitive threat. They are not doing this for all goods and sectors... it’s clearly targeted to protecting their producers in these sectors.”

If manufacturers move to countries with less strict environmental policies, overall emissions rise, in what is known as “carbon leakage”. To prevent this, as well as to level the playing field for industries that already pay for their emissions, the import tax will apply to products that are not manufactured to the same environmental standards as those in the importing country.