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Lead MEP says carbon border tax money must help poor nations

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The revenues from the EU’s proposed carbon border tax should be used to support the decarbonisation of least-developed countries, a leading MEP has proposed in a draft report leaked to the press on Wednesday (5 January).

The so-called carbon border adjustment mechanism (CBAM), which will set a new levy on imports of iron, steel, cement, fertiliser, aluminium, and electricity, is expected to provide €1bn per year once it is fully implemented.

In a draft report from the European Parliament environment committee, Dutch centre-left MEP Mohammed Chahim has called for the mobilisation of these resources to help support poorer nations’ climate efforts.

The text excludes the granting of any exemptions and, instead, it states that “financial support shall be provided to support least-developed countries’ efforts towards the decarbonisation of their manufacturing industries”.

“We need to avoid CBAM affecting LDC’s [least-developed countries] disproportionally. Direct exemptions would however be the wrong signal,” Chahim tweeted on Wednesday, arguing that this mechanism should foster cooperation rather than confrontation.

He added that only trade partners with “explicit” carbon pricing policies in place would benefit from certain exemptions under the CBAM.

The report, which is a response to the European Commission proposal presented last July, is seen as a complete overhaul of the initial text.

Under the EU executive’s plan, the carbon border tax, due to enter into force in 2026, will target certain goods produced in third countries with lower environmental standards.

But Chahim’s report calls for an earlier implementation and a wider scope of imports, with basic chemicals, polymers, and hydrogen added to the list of products covered by the new levy.

Additionally, a transitional period designed to help businesses adapt to the system has been shortened from two to one year and the deadline to phase out free allowances has been set to the end of 2028 — eight years earlier than in the commission proposal.

Under the cap-and-trade Emission Trading System, free permits help industry, aviation and, in some countries, the electricity sector, remain competitive against rivals based in third countries.

But the commission’s plan to phase out free allowances between 2026 and 2035 has been criticised by green groups, which accused the EU executive of protecting carbon-intensive industries from the ‘polluters pay’ principle.

Accelerating the phase-out of free allowances by end of 2028 instead of 2035 has been welcomed by NGOs, such as German Watch, which sees it as “[a] clear improvement and important step for industry transformation”.

Another significant change made in the report is the creation of a European CBAM Authority, which would be responsible for verified declarations of emissions and certificates for importers.

According to Pierre Leturcq, policy analyst of the Institute for European Environmental Policy, this proposal answers “the risk of circumvention” arising from a decentralised system of national authorities.

This would prevent foreign companies from introducing their products into the EU market through those member states whose administrations have the lowest capacity to control emission declarations, he said.

Besides accelerating global climate action, the CBAM aims to prevent businesses from transferring production to third countries with less strict climate rules – dubbed ‘carbon leakage’.

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Kill the Bill and period protests: human rights this fortnight – in pictures | Global development

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‘No embargo’ on meetings with Putin, EU says

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EU leaders are free to meet Russian president Vladimir Putin despite his threats to start a new war with Ukraine, the EU foreign service has said. “There is no embargo on contacts and visits between member states and Russia. Each member state decides … on their own judgment,” the EU foreign service told EUobserver. The comment follows reports Croatia invited Putin to visit and that Hungary’s leader will meet him.

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Vulnerable Malians could ‘pay the price’ of heavy sanctions, warn aid groups | Global development

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More than a dozen aid organisations have called for humanitarian exemptions to heavy sanctions imposed on Mali after the military leadership postponed planned February elections.

The EU has announced support for the sanctions imposed earlier this month by the Economic Community of West African States (Ecowas), which include closing borders and a trade embargo.

But this week, 13 international groups working in Mali warned of devastating consequences for the population, a third of whom rely on aid.

Humanitarian access is hindered by the Malian interim authorities’ decision to reciprocate border closures with Ecowas member states, except Guinea.

Thousands of people demonstrated against the sanctions last week in the capital Bamako, carrying placards saying “down with Ecowas” and “down with France”.

The country is in the grip of the worst food insecurity in 10 years.

A joint letter signed by the NGOs, including the International Rescue Committee (IRC), Care and the Norwegian Refugee Council, said: “To continue their work effectively, humanitarian actors must have unfettered access for the transportation of life-saving goods including food and medicine, as well as guarantees that they can transfer funds into the country without violating the sanctions.”

Mali’s current insecurity dates back to early 2012 when northern separatists rebelled against the government. Islamist militants that initially allied with the separatists, including Ansar Dine, al-Qaeda in the Islamic Maghreb (AQIM), and the Movement for Unity and Jihad in West Africa, ultimately hijacked the rebellion.

France, the former colonial ruler, made a military intervention in 2013 on the government’s side against the militants. The UN has also deployed an estimated 18,000 peacekeeping staff, in what was called its most dangerous mission.

The Malian military, led by Col Assimi Goïta, has conducted two coups in two years and reneged on promises to hold new elections. The junta’s most recent power grab, in May 2021, was the fifth coup since Mali’s independence in 1960 and it has been unwilling to commit to transition to civilian rule, despite international pressures.

Postponement of elections has been blamed on Islamist insecurity, an impasse that has deepened with the arrival of private military contractors belonging to the Russian mercenary firm Wagner Group. European states have condemned Wagner’s presence, concerned it will enable the military to hold on to power.

EU foreign policy chief Josep Borrell said this month that EU sanctions on Mali were in part in response to the involvement of Russian contractors. France is withdrawing troops, but 14 other EU members, led by Sweden, had established a taskforce to replace them in a three-year mandate. As tensions intensified over the Wagner Group, Sweden said last week that it had decided to withdraw its troops.

France, which holds the rotating EU presidency, has been vociferous in its support of sanctions but Russia and China have blocked the UN security council’s move to follow suit.

Ecowas has frozen financial aid and Malian assets at the Central Bank of West African States.

Elena Vicario, director for the Norwegian Refugee Council in Mali, said: “Malians are already bearing the brunt of the humanitarian catastrophe, punctuated by horrifying attacks against civilians. Sanctions must not hold us back from delivering essential assistance in a country where drought, rising insecurity, and the economic impacts of Covid-19 are already pushing millions of Malians over the edge.”

Franck Vannetelle, the IRC’s country director in Mali, echoed Vicario, saying: “Despite more than a third of the country’s population being dependent on humanitarian aid, organisations working in Mali already face severe access constraints. It’s imperative that the international community keeps responding to people’s urgent needs, and that any new sanctions have concrete humanitarian exemptions. These must be monitored and implemented, or the most vulnerable people in Mali will pay the price.”

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