Q8 · UPSC current affairs · 3 October 2026 · News · India EU Free Trade Agreement

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Consider the following statements regarding trade and environmental mechanisms involving the European Union:1.The Carbon Border Adjustment Mechanism (CBAM) is a tariff mechanism taxing carbon-intensive imports.2.CBAM is administered directly by the World Trade Organization as an export subsidy.Which of the statements given above is/are correct?

A Both 1 and 2
B 2 only
C Neither 1 nor 2
D 1 only

Correct answer: (d) 1 only

Explanation

Statement 1 is correct as CBAM is an EU tariff mechanism taxing carbon-intensive imports to level the playing field for domestic producers. Statement 2 is incorrect because it is an EU tariff mechanism, not an export subsidy administered by the World Trade Organization.

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