The EU's suggestion that India could avoid its carbon tax by imposing a similar levy locally will not help the domestic players much, as they would still be liable for the duty for their exports to the European Union, think tank GTRI said on Wednesday.
The main issue is that carbon prices are usually based on a country's economic situation, so simply adding a local tax would not reduce the overall tax burden significantly, the Global Trade Research Initiative (GTRI) said.
While the EU (European Union) can afford high carbon prices, it may not be sustainable for a developing country like India, it said.
Further explaining, it said at present, the global average carbon price is around USD 6 per tonne of CO2 and if India were to establish an Emissions Trading System (ETS) or set a carbon price, it is expected to be less than USD 10 per tonne of CO2.
Even with such a system, Indian firms would still need to pay the EU the difference amounting to USD 51.3 per tonne of CO2 under the Carb
