Wahyu Dwi Anggoro
Asian subregions with higher shares of carbon-intensive exports to Europe, particularly Central and West Asia, would be more negatively affected by CBAM and the EU’s emissions trading system. Given the expected distributional impacts, especially on developing economies in Asia, proper incentive mechanisms are necessary to encourage widespread adoption of carbon pricing, according to the report.
The report also recommends measures to decarbonize international trade and global value chains. Carbon emissions from these sources are rising faster than from other sources—and they are growing faster in Asia than in other regions. Among the recommendations are implementing targeted policies that encourage trade in climate-friendly products and services; supporting environmental regulations and standards; facilitating the transfer of green technologies; and supporting governments and international institutions in promoting green infrastructure and investments. The report further calls for global cooperation to develop universally accepted accounting frameworks that can effectively track emissions embedded in products and services.
Among its other key findings, AEIR 2024 shows that despite concerns about the risk of global fragmentation, global value chains in Asia have recovered well following the COVID-19 pandemic. While regionalization of global value chains has progressed in recent years in Asia, the report finds no clear signs that “reshoring” is gaining traction in Asia or globally. (WHY)
