High carbon goods imported into the UK should be subject to new tariffs, to help ensure other countries meet their obligations to achieve net zero greenhouse gas emissions as well as the UK , said an influential committee of MPs.
A Carbon Border Adjustment Mechanism (CBAM) would penalize companies and countries that try to shirk responsibility for cutting emissions, MEPs said, and incentivize certain industry sectors to move away from harmful practices. environment.
Philip Dunne, the committee’s Conservative chairman, said such a move was necessary to achieve net zero: ‘The targets, timetables and overall strategy for achieving net zero have been set: now the work needs to be done. accelerate to make ambitions a reality. ”
For some industries, such as steel, the switch to greener production methods needed to reduce UK emissions in line with the 2050 net zero target may result in short-term costs, in new equipment and techniques .
But if rivals in other countries do not take such action and continue to use fossil fuels and emit large amounts of carbon, their products could be cheaper and undermine the UK, leaving British industry in a very disadvantageous situation.
This is called carbon leakage because greener industries in the domestic market lose out and the carbon is instead emitted overseas.
A CBAM could level the playing field, imposing tariffs or taxes on imports of these products, and enjoys broad support among many economists, provided it can be used to target products and specific practices rather than as a protectionist measure to keep goods out. developing countries in particular.
The Environmental Audit Committee of MPs called on ministers to act unilaterally to introduce such a tax. The EU is considering imposing CBAMs, and the US government has also signaled that it may be open to such measures in the future.
The Treasury would be wary of taxing CBAMs because they could raise the price of certain goods at a time when consumers are already facing a cost of living crisis. The government is also concerned that the implementation of a CBAM could set back ministers’ attempts to strike post-Brexit trade deals around the world.
But Dunne said MPs had carefully considered those points. “Our committee is clear that the advantages of a CBAM outweigh the disadvantages,” he said. “For too long, the emissions from our consumption have effectively been ‘outsourced’, leaving the problem out of sight and out of mind. But we all need to be more responsible with our consumption and the practices our businesses and organizations adopt.
The UK is chair of the UN climate negotiations for most of the rest of the year, having hosted the Cop26 climate summit in Glasgow last November. This puts the government in a strong position to initiate CBAMs, which have been widely discussed for years but not implemented.
Dunne added that the government should consult with business at all stages: ‘Our committee is under no illusions that this will be a difficult policy to put in place, with a clear advantage in evolving multilaterally with other trading partners, and therefore all companies must have a voice in the discussions, and the government must be upfront with its intentions.
A Treasury spokesperson said: “The UK is leading the way in the transition to net zero, has cut emissions faster than any other country in the G20 and continues to have the most ambitious climate targets for 2030.
“As we move to net zero, we recognize the importance of continuing to address the risk of carbon leakage to ensure our ambitious decarbonization policy is not compromised.
“This is a global issue, which is why we are working with our international partners to address this and other climate challenges, as well as explore national options.”
