A carbon border adjustment tax is a logical extension of a domestic carbon pricing mechanism. The European Union is bringing one into being and the United States is considering one – even though its carbon pricing is far less mature and more patchwork than across the Atlantic.

Australia now has a domestic carbon pricing mechanism – the beefed-up Safeguard Mechanism. So, it makes sense for Climate and Energy Minister Chris Bowen to study the feasibility of introducing a carbon border adjustment mechanism – a CBAM – to protect Australia’s carbon intensive steel and cement industries from imports that aren’t subject to a comparable price for their carbon.