© Reuters. FILE PHOTO: Liam Fox is seen outside Downing Street in London, Britain January 30, 2020. REUTERS/Simon Dawson
By Susanna Twidale
LONDON (Reuters) – Britain’s former trade minister Liam Fox has called for a carbon border tax to help protect businesses against cheaper imports from countries with less strict climate policies.
“I hope the government will bring forward concrete plans to create a workable proposal on this as soon as possible,” he told Reuters.
Fox, trade minister from 2016-2019, was speaking ahead of a meeting of the world’s seven largest advanced economies in Britain next month and will outline his tax proposal in a speech to the Centre for Policy Studies on Thursday.
“For UK and European business, there is an increasing view that the carbon price is now so high it is making them uncompetitive in a global context,” he said.
“Why should they be taking measures to reduce their carbon footprint while high-polluting countries can sell into their markets without these costs.”
Britain has a target of reaching net zero emissions by 2050 and last week launched a domestic emissions trading system charging power plants, factories, and airlines for each tonne of carbon dioxide they emit.
The British ETS replaces the country’s participation in the EU’s ETS, which it left following Brexit.
Prices in the British scheme trade around 51.50 pounds ($72.98) a tonne, a premium to Europe’s prices, which hit a record 56.90 euros ($69.62) a tonne last week.
A World Bank report this week said around a fifth of the world’s greenhouse gas emissions are covered by a price on carbon, either via an ETS or a carbon tax, but the cost of carbon varies greatly in different regions.
The EU is already drafting plans to impose a carbon border tax to protect energy-intensive industries such as steel, likely to not take effect before 2023.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.