carbon tax on imports

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    The government has said that emissions-intensive, trade exposed industries such as building products, steel manufacturers, etc will be given "generous assistance" (see
    Combet and RAIA fire-up in carbon tax debate

    So if the products produced by these industries retain the same selling price due to government assistance, as before the tax, where is the incentive for buyers of these products to change their behaviour to use less of these products and hence emit less carbon, or to switch to alternative products which are less carbon-intensive?

    The whole purpose of the carbon tax is to change the behaviour of people and organisations so they emit less carbon. If they are compensated or otherwise assisted so they are no worse off economically after the introduction of the tax, where is the incentive to change?

    Wouldn't it be a more effective approach to tax products imported from a country which doesn't have a comparable carbon tax or ETS, so that these products are made equally expensive as a result of the carbon tax as domestically produced goods? So the organisations or individuals buying these products face a higher buying price regardless of whether they buy domestically produced goods or imported goods. Understandably, taxing imports equitably is more difficult than just giving assistance to trade exposed industries as it is next to impossible to work out how much carbon tax should be applied on imports.

    Any references or examples of how other countries have addressed this dilemma would be useful (Sweden, Finland, New Zealand, etc).
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