Europe's Carbon Border Levy May Be Avoided, Climate Chief Says

(Bloomberg) --

Fresh pledges from some of the world’s largest polluters to slash emissions further may curb European Union plans to start a carbon border levy.

President Elect Joe Biden’s decision to return the U.S. to the Paris Agreement will help speed efforts to limit global warming by creating a “climate-neutrality club,” top climate officials from China and the EU said at the digital European Business Summit on Monday.

The past two months have seen a flurry of bold climate announcements from the likes of China and Japan, which means that more than half the world’s emissions are now covered by targets to eliminate them, according to Climate Action Tracker.

That may in turn reduce the need for the EU to implement a carbon border adjustment mechanism, said Frans Timmermans, executive vice-president of the European Commission. The EU regulatory arm is drafting a law, to be unveiled next year, that would start penalizing imports of certain goods from countries with weak pollution rules.

“The level of the carbon border adjustment mechanism and the intensity of its use will depend on our international partners,” Timmermans said. “If they do the same thing as we’re doing, if they want to show the same ambition and go in the same direction, the need for the carbon border adjustment mechanism will be less.”

The election of Biden could also help to thaw relations between China and the U.S. on the issue of climate change. President Donald Trump once accused China of inventing climate change as a hoax to harm US competitiveness - something China’s officials have denied.

“There’s lot of future potential if the U.S. returns to the multilateral climate governance mechanism under the Paris Agreement,” said Xie Zhenhua, China’s climate change envoy, at the same conference. “That will not handicap China-EU cooperation because we stand ready to work with all countries.”

Speaking on the same panel, Mauro Petriccione, director general for climate at the EU Commission, said there is now a “climate- neutrality club” in the making since China announced its target for net-zero greenhouse gases by 2060.

“If you look at the broader picture, you have Japan who has announced climate neutrality by 2050, Korea who is still debating what the 2050 neutrality objective relates to, President Biden has been talking publicly about climate neutrality as well, Canada has announced new legislation on climate neutrality by 2050. There’s still lots of smaller economies going in this direction,” he said.

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