As British manufacturers grapple with tightening margins and sluggish export growth, an apparently esoteric but consequential decision is looming. At the UK–EU summit in London next week, the possibility of linking carbon markets is on the table. The UK government should make this a priority. The EU’s Carbon Border Adjustment Mechanism (CBAM) – which will apply a charge to EU imports based on their embedded carbon emissions – is set to impose new levies on many UK exports in a matter of months. Failure to agree a clear path towards linking carbon markets – and thereby exempt the UK from the EU CBAM – could compound existing pressures on the UK economy and stifle much-needed investment in the energy sector.
The UK government should prioritize linking carbon markets at the UK–EU summit (Chris Aylett – Chatham House)
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