Border adjustment tax invites retaliation

I know of no deci­sion on whether the Aus­tralian gov­ern­ment will include a bor­der-adjust­ment tax in it’s imple­men­ta­tion of a car­bon-emis­sions tax. There seem to be dif­fer­ences in the Gillard cab­i­net over this point. But the report­ed Chi­nese reac­tion to the EU’s air­line tax is omi­nous.

Mr Enders [Chief Exec­u­tive of Air­bus] told Ms Hede­gaard [EU Cli­mate Com­mis­sion­er] in a joint May 24 let­ter with Vir­gin Atlantic chief exec­u­tive, Steve Ridg­way, chair­man of the Asso­ci­a­tion of Euro­pean Air­lines: “If the EU goes ahead with its plans, Chi­na has already … announced its inten­tion to deploy coun­ter­mea­sures against Euro­pean avi­a­tion.” Extract from FT.com

Chi­na has been express­ing strong con­cerns about the pro­tec­tion­ist impact of autonomous abate­ment mea­sures since before the Copen­hagen Kyoto con­fer­ence.

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