Global Daily Tax News, Australia Mulling Carbon Border Adjustment Mechanism Options, (Nov 16, 2023)

The Australian Government is seeking expert advice on the potential introduction of a carbon border adjustment mechanism and also on other options.

The carbon leakage review, to be undertaken by Professor Frank Jotzo, will assess the need for further policy options and consider the feasibility of a carbon border adjustment mechanism for Australia – particularly for steel and cement.

The CBAM is a climate measure, proposed in response to the risk of carbon leakage. The mechanism would put a carbon price on imports that corresponds to what would have been paid had the goods been produced domestically.

Two rounds of consultation with Australian industry, environmental groups, research experts, international trade partners, and local communities will inform the review, with advice to be presented to the Government by September 30, 2024.

Professor Jotzo is a professor at the Australian National University's Crawford School of Public Policy and is Head of Energy, ANU Institute for Climate, Energy, and Disaster Solutions. He also advises the International Panel on Climate Change, as well as national and state governments on climate, economic, and trade.