Thread by @EconMitch

The EU is planning a tax on African carbon with its Carbon Border Adjustment Mechanism (C-BAM)

Our new analysis shows material -ve impacts on some African economies.

@SPleeck, Fatima Denton @UNUINRA, and I analyse impacts and implications for #EUAUSummit.

Thread:

1. The EU’s C-BAM should reduce Greenhouse Gas emissions by preventing ‘leakage’ to places without carbon pricing. The most-affected imports are from middle-income countries inc China, Russia

But the impact for some African economies will be very significant

2. The worst-affected is Mozambique via its aluminium exports.

It’s plausible C-BAM could reduce Mozambique's GDP by over 1 per cent.

The EU recognises that Mauritania, Sierra Leone and Senegal will also be negatively affected. Algeria and Egypt too.

3. Some have argued @SamuelMarcLowe @CER_EU for an exemption from the carbon import tax for Least Developed Countries (LDCs).

We’re sympathetic, but that would create unhelpful incentives to relocate dirty industry...

4. The European Parliament has called on @EU_Commission to reallocate C-BAM revenues to LDCs.

Good principle but too small: the EU’s wider finance to Africa is lacking - just 19% of the total.

We argue Africa should expect at least 33% (would still lag the UK and US).

5. At the #EUAUSummit next week; we argue

@_AfricanUnion should not seek C-BAM exemption

@EU_Partnerships should increase Africa finance to a third of total + technical support on carbon pricing + monitor impacts

Full analysis and blog here:
cgdev.org/blog/eu-tax-af…