Greenhouse gases do not stop at borders. Emissions in China, or the US, also cause climate damage in the UK.
Carbon border adjustments are import tariffs designed to ensure that this damage is paid for. They also ensure that imports from countries without carbon pricing do not have an unfair competitive advantage over domestic firms. Furthermore, it’s necessary to give carbon-price rebates to exporters so that UK firms are able to fairly compete in such countries.
Without these adjustments, UK companies subject to carbon pricing would go out of business. The overall effect would be to seriously damage the UK economy and to ensure that our goods and services are produced in countries that are doing much less to reduce their own emissions. Britain’s economy and the World’s environment would both be worse off.
The Citizens’ Climate Lobby’s core policies of carbon-pricing and revenue-recycling simply cannot work without carbon border adjustments.