India worried about carbon tariffs from the European Union

This article from yesterday's Economic Times of India entitled, "Exports to Europe may trip on carbon barrier", shows why Canada should be prepared to have carbon taxes. The article begins with:

"Indian goods being exported to the European Union may face higher barriers if the 27-member grouping goes ahead with a proposal to place a carbon tax on goods imported from advanced developing countries."

Of course, all is not cut and dry. The article notes that a bilateral agreement between the EU and India contains a national treatment clause which says that, "bilateral trade partners have to treat goods from partner countries in the same way as goods originating from the home country." The problem, I think, is that, because the EU's cap and trade system awards credits for free, and does not auction them off, it could be argued that goods orginating in the EU do not pay all of the carbon burned in the fossil fuel energy that goes into their manufacture. In addition, some EU countries have their own carbon tax, but some do not.

If Canada had a carbon tax, then exports to the EU would not be faced with a carbon tariff.

The take-home message is that carbon tariffs are coming. You can pay them to a foreign government or you can pay them to your own government (which, in the Green Shift plan, is going to return it to the people in direct tax breaks). Let's get ready.