Recommendation 22

We previously reported in 2021 that it was critical that actions to reduce the UK’s emissions did not result in moving emissions abroad, so-called ‘carbon leakage’, which would undermine global efforts to tackle climate change. At that time, government did not have a clear way of determining whether its actions to reduce emissions in the UK transferred emissions to other countries, and HM Treasury told us that it was considering the feasibility of a tax based on carbon embedded in imports (a carbon border adjustment tax) to reduce the risk of pushing emissions abroad.81