Source · Select Committees · Environmental Audit Committee
Recommendation 8
8
Paragraph: 54
Our recommendations to Government on the design of the carbon border approach are as follows:...
Conclusion
Our recommendations to Government on the design of the carbon border approach are as follows: a) to ensure, from the outset, that the carbon border approach is designed to adhere to the principles of common but differentiated responsibilities and respective capabilities set out in the Paris Agreement and Glasgow Climate Pact in respect of low- and middle-income country trading partners. This might be through the CBAM design itself, or through a complementary policy in parallel to the CBAM; b) to ensure that the UK CBAM is designed in accordance with WTO rules; c) to establish forums to enable inclusive engagement with trading partners on the design and implementation of the carbon border approach. These should include forums specifically for engagement with low- and middle-income country trading partners; and d) to conduct analysis to understand how the carbon border approach might interact with free trade agreements.
Paragraph Reference:
54
Government Response
Acknowledged
HM Government
Acknowledged
Upholding trade openness remains a priority for this Government. As set out above, if implemented, the Government is clear that any policy or suite of policies would need to carefully balance a range of priorities for the UK, including compliance with WTO rules and our commitment to free trade alongside carefully considering the needs of developing countries. We will continue working with our international partners to advance our global climate goals, while maintaining a fair and open trading system. The UK is actively involved in discussions in the G20, the WTO and the OECD to ensure we are building an approach to carbon leakage mitigation that works for the broadest range of countries, including emerging market economies and developing economies. As the current chair of the Committee on Trade and Environment and an active participant in Trade and Environmental Sustainability Structured Discussions (TESSD), the UK will continue to engage with all partners to explore trade-related solutions to carbon leakage at the WTO. The UK sees the TESSD as a space in which to discuss evidence, solutions to tackle the root causes of carbon leakage, and WTO-consistent approaches. The Government appreciates the importance of considering the interests of low- and middle-income country trading partners. The UK is already supporting developing countries with their climate change ambitions, having doubled our international climate finance to £11.6 billion over the next 5 years including over £590 million to support REDD+ which helps developing countries reduce emissions from deforestation and benefit from carbon trading rules. Additionally, we have provided £20 million to the Partnership for Market Implementation fund to help developing countries put a price on their emissions using carbon taxes and emissions trading schemes. We will continue to work closely with developing countries to support their commitments on climate change, including their work on carbon pricing.