Carbon border tax could unite goals to reach net zero

A new report by the Centre for Policy Studies (CPS) says the UK government could level up and decarbonise the economy simultaneously by introducing a carbon border tax, alongside a selection of other policies.

A carbon border tax on energy intensive imports would see importers from outside the UK put on a level playing field with British businesses. This would help support the regions most at risk of being left behind by the push for net zero, many of the same areas that the government wants to ‘level up’.

Ahead of the publication of the government's levelling up White Paper, the CPS report – Levelling Up and Zeroing In – recommends a range of other policies to ensure that the net zero agenda works to help the areas most in need of levelling up. These include boosting R&D through spending and regulatory changes, implementing ‘full expensing’ and a ‘green super deduction’ so businesses can invest in greener tech, extending carbon pricing to more of the economy, reforming skills provision, and reinvesting the revenues from carbon policies into helping local areas transition to net zero, including via a new breed of technical universities.

Commenting on the report, Sam Hall, Director of the Conservative Environment Network says: ‘Net zero and levelling up are two sides of the same coin. Levelling up is about boosting economic opportunities in every part of the UK, while net zero is one of the biggest economic opportunities of this century, with the UK's industrial heartlands likely to benefit disproportionately from a boom in green jobs. The UK already has a head start in several green industries and has significant potential to be global leaders in others. The CPS has put forward a pragmatic set of proposals to realise the substantial economic opportunities from net zero for the regions of the UK.’

Eamonn Ives, Head of Energy and Environment at the CPS and report co-author, adds: ‘Having just hosted COP26, it is now time to get on with the next phase of decarbonising Britain’s economy. But at the same time, progress must be made on the government's levelling up agenda. By tackling emissions from challenging sectors such as steel production or other industrial activities in the right way, these two goals are not just compatible but complementary. The package of policies mapped out in our report will help put Britain at the forefront of the global net zero realignment while providing a boost to the UK regions that need it most.’

The introduction of a carbon border tax could help the UK level up and reach net zero by 2050
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