Proposed legislation will target China and other countries with loose environmental rules
The noose is tightening on exporters around the world — including in SA — that have high levels of greenhouse gas emissions in their production processes.
“Using trade to advance American manufacturing — and to disadvantage dirty or high emissions products — is ultimately the only way we are going to put effective pressure on China, Russia and India to dramatically reduce their emissions,” Coons told the newspaper. The measures present a a threat for SA exporters who are dependent on Eskom for their energy needs. Eskom is responsible for more than 80% of electricity generated in the country, and is considered the worst polluter in Africa and the 14th worst emitter of greenhouse gases in the world.
SA is also facing a crippling energy crisis that has prompted the government to consider extending the life of Eskom’s polluting coal-fired power stations which were due to be shutdown as it seeks to bolster the country’s long-term energy security. Such a move would perpetuate the high level of emissions and increase the risk of SA bearing the brunt of regulations such as those proposed in the US.
Trade Law Chambers director Rian Geldenhuys pointed out that in addition to the trade impact, investments could also be affected as the legislation could also discourage US companies from investing in countries such as SA with less strict regulation. It could also encourage US companies already invested in SA to invest elsewhere.
In April the EU approved the world’s first tax on carbon intensive imports. In terms of the carbon border adjustment mechanism, importers will have to start paying the tax in 2026 though they will have to start accounting for the carbon emissions associated with their products in October.
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