Q. With reference to Carbon Border Adjustment Mechanism (CBAM) consider the following statements:
1.It is a law adopted by the countries of Global North.
2.CBAM is expected to have the economic impact on the countries of Global South.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B

Explanation –

Statement 1 is incorrect. It is not a law but a tariff/tax imposed by the European Union on the import of carbon intensive products such as cement and electricity. The tax will be imposed on imported goods on the basis of the emissions during their production process.

Statement 2 is incorrect. This tax mechanism will impact the countries of the global south as they are developing countries and hence will produce more emissions compared to the countries of global north.

Source: The Indian Express