A carbon sequestration mechanism (CBAM) would penalize companies and countries trying to avoid responsibility for emissions reductions, lawmakers said, and would motivate some industrial sectors to move away from environmentally harmful practices. Philip Dunne, chairman of the Tories Committee, said such a move was necessary to reach a clean slate: to make ambitions come true. ” For some industries, such as the steel industry, the transition to greener production methods required to reduce the UK’s zero zero target by 2050 may result in short-term costs for new equipment and techniques. But if rivals in other countries fail to take such action and continue to use fossil fuels and emit large amounts of carbon, their products could be cheaper and degrade the UK, leaving British industry at a serious disadvantage. This is known as carbon leakage, as the greener industries in the domestic market lose and coal is emitted abroad. A CBAM could level the playing field by imposing duties or taxes on imports of such products, and has widespread support from many economists, provided it can be used to target specific products and practices instead of being used as a safeguard for avoiding goods especially from developing countries. The committee’s environmental audit committee called on ministers to act unilaterally to introduce such a tax. The EU is considering imposing a CBAM and the US government has also signaled that it could be open to such measures in the future. The Treasury Department is wary of imposing CBAMs, as they could raise the price of some goods at a time when consumers are already facing a cost-of-living crisis. There are also fears in the government that implementing a CBAM will now thwart ministers’ efforts to forge post-Brexit trade deals around the world. But Dunne said MPs had carefully considered these points. “Our committee is clear that the advantages of a CBAM outweigh the disadvantages,” he said. For too long, emissions from our consumption have been essentially “overestimated”, leaving the problem as invisible and indifferent. “But we must all take greater responsibility for our consumption and the practices adopted by our businesses and organizations.” The United Kingdom is chairing the UN climate talks 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 lead the CBAMs, which have been widely discussed for years but have not been implemented. Dunne added that the government should consult with businesses at all stages: “Our committee has no illusions that this will be a difficult policy to do right, with a clear advantage of moving multilaterally with other trading partners, and therefore all companies must have a voice in the debates and the government must be in advance with its intentions. “ A spokesman for the Treasury said: “The United Kingdom is leading the way to zero, has reduced emissions faster than any other G20 country and continues to have the most ambitious climate targets for 2030. “As we move to zero, we recognize the importance of continuing to tackle the risk of carbon leakage to ensure that our ambitious carbon emissions policy is not undermined. “This is a global problem, which is why we are working with our international partners to address this and other climate challenges, as well as to explore domestic options.”
