'Avoid unilateral barriers' call a win for India at COP28 climate summit

India successfully led the negotiations on the inclusion of strong language against unilateral trade measures to combat climate change, such as the Carbon Border Adjustment Mechanism (CBAM) by the European Union, in the final Global Stocktake text of the 28th Conference of the Parties (COP28) in Dubai.

The final text in paragraph 154 “recognizes that Parties should cooperate on promoting a supportive and open international economic system aimed at achieving sustainable economic growth and development in all countries and thus enabling them to better to address the problems of climate change, noting that measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.”

Senior negotiators representing the BASIC nations (Brazil, South Africa, India, and China) said that India led the push for the inclusion of strong language around “unilateral” measures in the final Global Stocktake text.

A negotiator from the BASIC nations said: “India, along with the BASIC nations, fought hard for the inclusion of paragraph 154 in its current form. Economic measures by the developed world should not come at the cost of global trade, especially when it will be cost-negative for poorer nations.”

Another senior negotiator revealed that the target of this crucial inclusion in the global stocktake text was not just the CBAM, but also the Inflation Reduction Act of the US. The negotiator said: “We thought of what is good for the Global South. We are open to green investments, but we will not carry the burden of historic polluters.”

A host of measures, such as the CBAM and regulations on deforestation by the EU, seek to penalise exporting countries that use carbon-intensive measures or cause deforestation for production and export. India has raised strong objections to the CBAM, labeling it a trade barrier, and has brought up the matter at various committees in the World Trade Organization (WTO). 

India’s stance is that since most WTO members are represented at the United Nations Framework Convention on Climate Change (UNFCCC) and participate in its negotiated outcomes, such as COP28, non-trade matters like the environment should be handled at such forums. India, in conjunction with South Africa, has urged WTO members to ensure that any environment and climate-related trade measures take into account the common but differentiated responsibilities and capabilities of all members.

Ajay Srivastava, founder of the research body Global Trade Research Initiative (GTRI), suggested that India should use the COP28 statement at the upcoming MC13 (World Trade Organisation 13th Ministerial) in Abu Dhabi in February 2024 to reach a definitive WTO consensus against the CBAM.

“The EU’s CBAM is a discriminatory, unilateral measure that does not stop the entry of polluting steel or similar products but merely tax them, and will disrupt the trade flows in radical ways within a decade without reducing warming. The aim should be to foster a consensus within the WTO against the CBAM, citing its potential for unjustifiable discrimination and trade restriction under the guise of combating climate change,” he added.

Hard-fought battle
 

 India led the talks for the inclusion of strong language around “unilateral” measures in para 154 of the Global  Stocktake text
 

 The target was not just the EU’s CBAM, but also the Inflation Reduction Act in the US
 

 India has already raised strong objections to the CBAM at the WTO