Taxing carbon at the EU border only if free pollution permits go

The document asserts that carbon border taxes must be contingent on the removal of free pollution permits under the EU ETS to avoid double-protecting industry and to provide a real incentive for emissions reductions. It argues that carbon leakage is not evidenced and that free allocations have historically functioned as subsidies. The author suggests that border measures should be temporary, non-protectionist, and complementary to global climate policies, while advocating for the use of enforceable environmental chapters in trade agreements to drive global ambition.

• The author claims there is no evidence that the EU Emissions Trading System (EU ETS) has harmed the global competitiveness of energy-intensive industries or caused 'carbon leakage' where production moves abroad.
• Free pollution permits are described as overgenerous subsidies; between 2008 and 2015, heavy industry earned over €25 billion from the EU ETS, and approximately 6.3 billion allowances (worth up to €160 billion) are expected to be allocated for free from 2021 to 2030.
• Implementing a carbon border tax while maintaining free allocations would protect industry twice against a non-existent threat and remove the incentive for emissions reductions; therefore, phasing out free allocation is the primary condition for the tax.
• To avoid being seen as 'climate protectionism' or alienating partners, border taxes should be temporary, apply only to imports (with no rebates for exports), and comply with WTO non-discrimination principles and UNFCCC requirements regarding common but differentiated responsibilities.

APA

Van den plas, S. (2019). Taxing carbon at the EU border only if free pollution permits go. Carbon Market Watch. https://carbonmarketwatch.org/2019/10/18/taxing-carbon-at-the-eu-border-only-if-free-pollution-permits-go/

Chicago

Van den plas, Sam. Taxing carbon at the EU border only if free pollution permits go. Carbon Market Watch, 2019. https://carbonmarketwatch.org/2019/10/18/taxing-carbon-at-the-eu-border-only-if-free-pollution-permits-go/.

Wikipedia

{{cite press release |last1=Van den plas |first1=Sam |title=Taxing carbon at the EU border only if free pollution permits go |publisher=Carbon Market Watch |date=18 October 2019 |url=https://carbonmarketwatch.org/2019/10/18/taxing-carbon-at-the-eu-border-only-if-free-pollution-permits-go/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{vandenplas2019taxing, author = {Van den plas, Sam}, title = {{Taxing carbon at the EU border only if free pollution permits go}}, publisher = {Carbon Market Watch}, year = {2019}, month = oct, url = {https://carbonmarketwatch.org/2019/10/18/taxing-carbon-at-the-eu-border-only-if-free-pollution-permits-go/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }