‘Carbon border tax’ proposed to curb CO2 imports
The UK should introduce a ‘carbon border tax’ on imports to reduce its reliance on carbon-intensive products from abroad, the Centre for Policy Studies (CPS) has said today.
In a new report, the think tank explains how carbon offshoring allows Britain to mask the full extent of the CO2 in its supply chains, with imported emissions not included in national statistics.
It reveals that the UK imports six times more electricity than it exports, including 40.4 GWh of Dutch coal-fired generation during the ‘coal free’ fortnight recorded last year.
Tony Lodge, research fellow at the CPS, said that this not only hides Britain’s true emissions, but also discriminates against domestic companies that are subject to climate levies like the carbon price floor.
“A carbon border tax would provide a far more accurate picture of Britain’s true carbon footprint, deter carbon offshoring and reduce global carbon emissions,” he continued.
“It would also establish a clear British policy lead on climate change as the COP26 summit approaches.”
The report also highlights the UK’s reliance on carbon-intensive raw materials like coal, explaining how the country is imports millions of tonnes from overseas for industrial use.
This carries additional emission costs, such as through transportation. The CPS said that stopping these imports would help put an end to the UK’s carbon leakage and lead to more local production.
It recommends that a carbon border tax be calculated with reference to the electricity mix of the exporting country, making it far simpler to introduce than economy-wide taxation.
This would also incentivise other countries to invest in nuclear or renewable energy, according to the CPS report, and generate revenues that could be used to cut costs for consumers.
"Establishing a new British carbon border tax would help reduce global emissions and better support domestic industries which have endured damaging carbon leakage," the report says.
"The alternative is more hidden pollution, fewer jobs, insecure power supplies and more global emissions."
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Chris Seekings is a reporter for TRANSFORM