Clean free trade

Report by: Centre for Policy Studies

Author(s): Eamonn Ives

June 10, 2021

This report from UK think tank the Centre for Policy Studies looks at

The UK has positioned itself post-Brexit as a champion of both free trade and environmental protection. This major new Centre for Policy Studies paper argues that these goals can and should be mutually reinforcing – that the UK should use its post-Brexit trading freedoms to push for green growth

The report recommends:

• Abolishing all tariffs and barriers on environmental goods and services
• Leading global efforts to develop carbon border taxes to ensure the climate costs of producing goods are accounted for Joining the Agreement on Climate Change, Trade and Sustainability, set up by New Zealand, Norway and others
• Reducing and ultimately abolishing tax breaks for fossil fuel production and consumption

It also argues that the presidencies of the G7 and COP26 put the UK in a unique position to promote and coordinate international efforts on environmental action. Free markets and clean free trade can be the best way to protect the environment and promote environmental standards. Ahead of COP26 in November, this report shows how the Government can reconcile its ambitions of leading in the fight against climate change and other environmental threats while championing free trade. The report, supported by the Conservative Environment Network, highlights that international trade has been instrumental in lifting billions from abject poverty. In the 12 months before the pandemic struck, the combined value of imports and exports exceeded £1.4 trillion, equivalent to 64% of total economic output. Trade is good for the environment, it argues, as it increases production efficiency, spreads new technologies, and equips individuals with the resources needed to address environmental degradation.

The report’s author, Eamonn Ives, sets out a number of steps the Government should take to speed up decarbonisation, improve air quality and increase prosperity both in the UK and overseas. Specifically, the think tank is calling on the government to:

• Remove tariff and non-tariff barriers on the trading of environmental goods and services, to minimise the costs and challenges to individuals and businesses of adopting green solutions.
• Reduce and ultimately abolish tax breaks and subsidies for fossil fuel consumption and production.
• Join the Agreement on Climate Change, Trade and Sustainability, one of the most high-profile environmental trade initiatives, which seeks to remove tariffs and liberalise trade on environmental goods and services.
• Lead on global efforts to introduce carbon border tariffs to ensure the climate costs of producing goods are accounted for and level the playing field between nations which enforce strict climate policies and those which do not.
• Task the Climate Change Committee with scoping a Net Zero consumption target allowing the Government to more accurately and honestly communicate British decarbonisation efforts.

Eamonn Ives, Head of Energy and Environment at the CPS, said: ‘International free trade and protecting the environment are often seen as contradictory. Our report argues that they can and do support each other – and makes a series of recommendations which the Government could adopt to ensure its newly independent trade policy is one that delivers both economic and environmental prosperity. ‘As the host of the G7 and COP26, it is incumbent on the UK to be leading the debate in terms of how we can better protect the environment, and rebound from the economic consequences of the coronavirus pandemic. By committing to Clean Free Trade, it can do just that.’