Carbon Border Adjustments — Industry Killer Or Opportunity To Make A Killing?

What will kill New Zealand Agriculture? Believe it or not, it could be re-branded export tariffs in the form of carbon border adjustments (CBA). That’s the opinion of international climate policy expert Byron Fay.

In the latest SuperTilt podcast, Byron made it abundantly clear that CBA legislation being proposed out of the EU, UK, and Japan will be one of the biggest threats to the NZ agriculture industry in the short to medium term. The NZIR report reinforces this opinion suggesting “there remain some longer-term risks to our exporters from the increased global focus on the environmental impacts of trade”.

For those not aware of CBA, they are a tax mechanism imposed on imported goods based on their carbon footprint. The aim of governments looking to implement CBA policies is to level the playing field for domestic industries that produce goods with lower carbon footprints but that may have higher costs than imports that may be cheaper but have higher carbon footprints.

Whilst cynics might suggest the CBA proposals are simply a palatable re-branding of an import tariff designed to protect local markets, it doesn’t change the impact such a policy may have on our dairy and meat exports. International CBA policies certainly seem to be a big looming threat to NZ’s…