I have long supported use of border taxes as ‘penalties’ on exports from countries that do not address the issue of climate change through measures such as taxes. I put the ‘….’ ears around penalties as they are not really penalties as such. They are just measures that mean residents (in this case in Europe) will be levied a tax on their use of carbon-creasting outputs regardless of their source. Originally the US was outraged when Europe suggested imposing such measures on US exports although, in the Waxman-Markey Bill that passed the US Senate, the US proposed imposing exactly the same measures on the rest of the world if it did not mitigate emissions to intended US levels. The US House of Representatives rejected this bill so it was never introduced.
While the local whiners complain about the costs of what is claimed to be unilateral actions to address Australian carbon emissions – they are not unilateral since Europe and other countries have solid regimes in place to address emissions – Australia has itself now been targeted for exporting products to Europe – namely air services – which are not subject to carbon taxes. The US is also subject to these measures and, like Australia, has reacted with indignation and total hypocrisy, to them. They are fair measures because European airlines have to bear such charges.
While I put the word penalty in ears, it is not entirely a misnomer. If Australia had imposed such charges it would have collected the tax revenues itself. That it hasn’t means that European governments will. The cost here intensifies the case for countries such as the US and Australia to begin the process of comprehensively pricing their carbon emissions. It is the right thing to so from the perspective of helping to protect the planet from damaging climate change but also avoids paying tax revenues to other governments that we could legitimately claim ourselves.