EU threat to introduce carbon border tariffs
THOUSANDS of Australians could be thrown out of work and the country could lose more than $4bn in GDP if other nations follow the EU’S lead and implement carbon border tariffs, the government has been warned.
Queensland and NSW would be the most affected states if trading partners such as the US, UK, Japan, China and South Korea implemented such schemes, economist
Nicki Hutley stated in a Climate Council report.
Drawing on modelling done by economists at Victoria University, Ms Hutley said under such a scenario some 50,000 jobs could be lost in resource-dependent Queensland, and 20,000 in NSW. The combined loss of national income would total $12.5bn, she said.
The EU’S Carbon Border Adjustment Mechanism will operate from 2023, slapping nominal tariffs on highemissions products such as iron, steel, cement, fertiliser, aluminium and electricity. The tariffs will be payable in 2026.
“By failing to match our trade allies on emissions targets and carbon pricing we are likely to be slugged with a carbon border tax. This will have devastating impacts in states where goods like coal dominate,” Ms Hutley said.
The Morrison government has criticised the EU scheme as a form of protectionism, but Ms Hutley said it was inevitable more nations would adopt carbon tariffs.
Trade Minister Dan Tehan said the best approach to reducing emissions was to “incentivise, not penalise”.
“Reducing carbon emissions won’t be achieved by raising barriers to trade; it will be achieved by lowering the cost and accelerating the uptake of green technology globally, particularly in developing countries,” he said.
Carbon Market Institute CEO John Connor said concerns about the impact of carbon tariffs were increasing for big businesses, but a government commitment to net zero would help allay some of those concerns.