The introduction of a carbon border tax by the European Union could force Africa back into exporting raw commodities, and sabotage its industrialization gains.
The President of the African Development Bank (ADB) Group Dr Akinwumi Adesina has cautioned that the implementation of this tax could have negative effects on Africa’s exportation and industrialization.
The European Union (EU) recently unveiled the inaugural phase of a Europe-wide carbon tax on imported goods as part of its climate change reduction measures, and Dr. Akinwunmi who had previously warned that Africa is in danger of losing up to $25 billion per year as a direct result of the tax, stated that this could penalize African countries.
He mentioned during a panel session at the Doha Forum titled “Decoding the Debt Dilemma—Unveiling Multilateral Solutions that, African producers of cement, steel, aluminum, and fertilizers who are trying to export to Europe will be charged a border tax of 80 euros per tonne, a costly levy that will end up forcing African countries down the value chain.
He continued that Africa merits a carve-out on the proposed tax because it is funding its transition.
Europe-wide Carbon Tax: More Perspective
Renewables alone are not enough to achieve industrialization, there needs to be a balanced energy mix that allows the use of natural gas to attain industrialization.
Dr. Akinwunmi demonstrated the importance of natural gas as a vital resource for Africa which should not be confined to foreign trade.
He pointed out that by initiating general penal that also impact developing countries, developed countries are changing the rules in the differentiated responsibility within the Paris Agreement.
The African Development Bank (ADB) asserts that this change is occurring by forcing developing countries to achieve net-zero carbon emissions much earlier than specified.
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