(1)   Is he aware of reports that the United Kingdom Committee on Climate Change has advised that Ministers should consider a carbon tax on imports to help struggling British manufacturers.

(2)   Would any existing trade agreements between Australia and the United Kingdom be adversely affected by the proposal; if so, what is the likely impact on Australian businesses.

(1)   The Minister for Climate Change, Energy Efficiency and Water is aware that border carbon price adjustments were included in a discussion of possible policy options to mitigate competitiveness concerns in the 2008 report “Building a low-carbon economy - the UK’s contribution to tackling climate change” by the United Kingdom (UK) Committee on Climate Change. The UK Committee on Climate Change is an independent body that advises the UK Government on emissions reduction. The Committee’s discussion of policy options to mitigate competitiveness concerns in the report did not make recommendations as to which options should be adopted, and the Minister is not aware of any formal proposals for a border carbon price adjustment measure being considered in the UK.

(2)   Other than arrangements under the World Trade Organization (WTO), there are no significant trade agreements in existence between Australia and the UK. Any proposed border carbon adjustment measure would need to be consistent with UK obligations under WTO rules. If a UK import carbon tax were ever proposed, its impact on Australian businesses would depend entirely on its design and purpose. The Australian Government routinely monitors progress of these types of issues and will undertake appropriate analysis of the implications for Australia, including the WTO consistency, of any specific proposals put forward.