- NEWSDAY.CO.TT - A la Une - 04/Sep 09:29

Navigating climate consciousness

As temperatures skyrocket, storms worsen and the threat of a climate crisis looms more urgently over the planet, nations around the world are looking to stimulate decarbonisation efforts. This is where systems like the Border Carbon Adjustments (BCAs) come in. By imposing charges on imports based on their level of production emissions, BCAs aim to encourage industries around the world to strengthen climate policy as well as safeguard those that are already climate-compliant. Safeguarding those compliant players includes preventing businesses from relocating to countries with little environmental policy and no charges, a practice known as carbon leakage. As the EU and UK aim to implement their Carbon Border Adjustment Mechanism (CBAMS) in 2026 and 2027, respectively, other countries are expected to follow suit. Challenges in the local market ​With these international changes underway, the question of TT’s position remains. The UK CBAM Implication for TT was a study published by UWI’s Dr Preeya Mohan and Jaymeion Jagessar, exploring just that. [caption id="attachment_1175961" align="alignnone" width="1024"] Dr Preeya Mohan presents the UK CBAM Implication for TT report at the British High Commissioner’s Residence, Maraval on August 21. - Photo by Angelo Marcelle[/caption] Combining research, data analysis and stakeholder workshops, the study, which was submitted to the British High Commission of Port of Spain, examines the potential impact of CBAMs on TT's economy and how they can be navigated. Mohan presented the study at the High Commissioner's residence, Port of Spain, on August 21. "The first major concern is the economic impact on developing countries in particular, countries like TT, which are going to face higher export prices, hurting our competitiveness," she said. "...If you want to pay less of these carbon taxes, the idea is that you decarbonise your production process and exports." Mohan, however, noted the difficulty in that, with limited tools for decarbonisation and limited access to climate financing due to TT’s high GDP. She said TT’s high-emission exports can become more costly under these new carbon policies. "We’re going to face increased costs from both (UK and EU CBAMS), our imports are going to be more costly as we export to the UK and EU and the carbon content of our products is going to affect the tax that we pay." With both the EU and UK CBAMs preferring third-party verified emissions data, recorded by exporters to calculate a country’s carbon tax, Mohan says TT will also face an administrative compliance burden for businesses. [caption id="attachment_1176023" align="alignnone" width="712"] Carbon capture and storage infographic. Photo courtesy European Commission, DG TREN -[/caption] "If we cannot provide that data, what will happen is that a default value will be provided to us. "That number is an average value that will be calculated across all countries in the world, and that default value will, of course, be higher than what we would submit." Mohan said it is in TT’s best interest to actively and accurately record the carbon content of its products. Despite 2023 data placing TT among the top ten carbon dioxide emitters per capita worldwide, due to our carbon-intensive industries, TT produces less than one per cent of the world’s total emissions. Mohan said compared to countries like China, which still use coal and markets like the US using shale gas as opposed to TT’s slightly less pollutive deepwater gas, TT’s carbon taxes could fall well below the global average tax, given the needed documentation. And despite the administrative burden, Mohan said systems like the CBAM incentivise shifts towards clean energy, drive innovations in clean technology and encourage overall decarbonisation. She said CBAMS also serves to stimulate the implementation of TT's carbon price, which will limit and tax carbon emissions locally and ease the taxes required under the mechanisms. The study recommends that the government establish a clear regulatory framework that defines mandatory reporting requirements for key export sectors, outlining methods for calculating direct and indirect emissions that meet international standards. The study recommended establishing a clear timeline for this implementation. "The government must urgently prioritise…investing in national MRV (measurement, reporting and verification) infrastructure, providing funding and technical support for the development of national databases, training programmes for industry personnel on emissions accounting and potentially establishing a national accreditation body for emissions verifiers," the report said. It also recommended closer collaboration with exporting companies to understand their specific needs and challenges in emissions monitoring and tailoring the MRV system to be practical and effective. Unified policy Mohan also encouraged stakeholders to advocate for a unified policy to reduce the burden on administrators. Head of Multilateral Environmental Agreements at the Ministry of Planning, Economic Affairs and Development, Kishan Kumarsingh, said the process is ongoing to legally require reporting of emissions according to prescribed international quality assurance standards and third-party verification. He said this legislation would be tied to any carbon pricing developments. "We are in the process of finalising a proposal to develop the carbon pricing mechanism. "We did some work with the UN climate change secretariat some years ago, and came out with some baseline work and some broad recommendations of what it would look like. "We now hope to build on that to develop a more robust carbon pricing system. "We know the UK CBAM comes into effect in 2027, but we will have some experience with it from January 2026 when we comply with the EU CBAM because they've already begun to do their calculations and come up with the formulae for the taxes that would have to be paid." Kumarsingh also noted the need for a robust carbon capture and storage system to further decarbonisation efforts. "The next step will be to submit the technical drafting instructions for the national transparency system, which will include the MRV system to make it more robust and reliant." Kumarsingh said the Planning Ministry has already been consulted by other countries to help them develop their own MRV system. Noting the UK’s goal of reducing its emissions by 68 per cent from 1990 levels by 2030 and becoming net-zero by 2050, British High Commissioner to TT Jon Mark Dean noted the potential challenges the UK CBAM could present to TT but assured a collaborative approach in its implementation. [caption id="attachment_1175963" align="alignnone" width="1024"] British High Commissioner to TT Jon Mark Dean noted the potential challenges the UK CBAM could present to TT but assured a collaborative approach in its implementation. - Photo by Angelo Marcelle[/caption] "We recognise that policies like the CBAM may have broader implications, in particular for partners like TT. "The export segments here are not only vital for the national economy but also closely linked to the UK with longstanding trade and investment relationships. "That’s why it's essential that we approach this transition with care, foresight and collaboration."   The post Navigating climate consciousness appeared first on Trinidad and Tobago Newsday.