The moral conundrum of carbon border taxes

Will a carbon trade war help or hinder the energy transition?

On paper, a carbon border tax is the perfect mechanism for coercing trade partners to reduce their emissions and, potentially, deliver a global deal on carbon pricing – the Holy Grail of COP26. In reality, world leaders are unlikely to agree on rules for a global carbon market, meaning border taxes will be introduced unilaterally. These will punish expo…