CEA flags carbon tax, says developing countries must not be penalised
Chief economic advisor V Anantha Nageswaran on Thursday voiced concerns against the imposition of tariffs by select advanced economies on high-carbon goods coming from other sources, arguing that developing countries must not be penalised in such a manner when they also contribute to the economic activities in the developed world.
He also stressed that the developing countries that are progressing towards renewable energy have become more vulnerable now than before when they were consuming fossil fuels, especially in the wake of geopolitical tension.
The CEA highlighted that in a globalised world, developing countries also help preserve the lives and businesses in developed nations.
“If so, what is the premium they are getting in return for taking action on their part to ensure economic activity in the developed world? So, that is also something we need to think about and obviously, the kind of premium that the developed world is contemplating paying to the developing world cannot be the carbon border adjustment mechanism,” Nageswaran said.
He was speaking at a regional workshop on climate finance and the role of insurance in financing climate risk, organised by the department of economic affairs and the Asian Development Bank.
The CEA highlighted that climate change also involves geopolitical risks, especially when it comes to the supply of critical minerals and rare earths. As developing countries, including India, move towards renewable energy, there is a concentration of these materials in some geographies
