Economy

Jan 6, 2014

Plan B? How a green tariff could save the carbon price

Here's a way to save the carbon price; levy a green tariff at the border, so Australian industry doesn't suffer. Critics say that would breach international trade law, but hold on -- Crikey has found that's not necessarily the case.

Cathy Alexander — Freelance journalist and PhD candidate in politics at the University of Melbourne

Cathy Alexander

Freelance journalist and PhD candidate in politics at the University of Melbourne

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Worried the carbon price is hurting industry and costing jobs? There’s a neat solution no one’s talking about — and it doesn’t involve axing the tax.

22 comments

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22 thoughts on “Plan B? How a green tariff could save the carbon price

  1. leon knight

    What an interesting concept – well worth pursuing.
    Good article, thanks Cathy.

  2. Roger Clifton

    Bravo! “Carbon tariff” is the answer to the anti’s plea of “Trade exposed products”.

    To earn a rebate, the carbon content of each exported product would be accounted and a certificate assigned to the product. If the importing country has a carbon tax, it would be imposed on the import according to its certificate. Other exporting countries would find they are competing on carbon content, whether they have have their own carbon tax or not.

    We wouldn’t actually need an international carbon price. Different countries could apply different carbon taxes on the same carbon certificates. But the certification process would need international agreement.

  3. Scott

    Sure, it could be legal, though I wouldn’t guarantee it. (international law is about as foggy as it gets).
    The better question is whether it is advantageous for a country like ours to put up more trade barriers.
    Australia is at it’s best when we can get access to global markets with minimal barriers(as our 20 odd million people don’t provide enough domestic demand for our major minerals/agriculture/education/services/research sectors). All our FTA’s try to encourage that.
    We benefit when the world lowers their barriers, so I don’t believe we should be putting up the shutters ourself, especially for the dubious benefit of keeping a carbon tax operational.

  4. Dawson Colin

    @Scott, I vigorously disagree that the carbon tax is of “dubious” benefit – it has been at least partly responsible for a slow-down in emissions. Our major problem of high dollar value has nothing to do with a carbon tax. However, I suspect you are onto something with the FTA. Our trade minister is furiously signing away sovereign rights at this moment. Daring to insist on our right to low-carbon production would not go down well with our great and powerful trading partners.

  5. Andybob

    You are assuming that the Coalition’s opposition to the carbon tax is rational and that overcoming one of their expressed objections will lead them to re-consider.

  6. CML

    I seem to remember that a ‘tariff’ clause was included in the original carbon pricing scheme proposed by Kevin Rudd’s first government. It was to be introduced in the future, depending on the number of countries who did something about carbon pollution.
    I always understood that some form of tariff would be needed to create/maintain a ‘level playing field’ for those countries who introduced carbon pricing. Maybe that part of the original Rudd scheme was removed by the Gillard/Green agreement on carbon pricing? I’ve certainly read/heard about this before, but it was some years ago now. Not only is it a good idea, but mandatory for those countries who have put a price on carbon.

  7. Aidan Stanger

    It would probably be costly to administer and while it may help our domestic competitiveness it will do nothing to help our exports.

    Factors like the high dollar are causing a lot more damage than the carbon tax ever did, so it’s better to deal with these, leave the unilateral carbon tax in place, and concentrate instad on producing low carbon alternatives.

  8. The Pav

    What? You expect rational economic policy allied with caring for the environment from the Abbott govt.?

    Yeah Sure! And Corey Bernardi will support women’s rights

  9. Mental Anarchist

    I have been preaching this solution ever since pricing carbon was proposed. The fact it has not been a serious discussion topic says much about our politicians, economists and MSM.

  10. CML

    @ Mental Anarchist. As I said above, I read/heard about this as part of the original proposal some years ago. The idea is not new.

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