Experts are saying the Carbon Border Adjustment Mechanism (CBAM), which has been proposed globally to tackle carbon leakage and enable carbon pricing to operate more effectively across the economy, could turn North Queensland into a major renewable energy exporter.
The CBAM, which was approved in June this year, will essentially act as a tariff on what is regarded as “climate-damaging imports,” according to Dr Taha Chaiechi, Associate Professor of Economics and Head of Economics and Marketing at the College of Business, Law and Governance at James Cook University.
“In July 2021, the European Union introduced Carbon Border Adjustment Mechanism as a preventative measure for carbon leakage, a situation where companies shift their production from a country with stringent emission policies to one that is more tolerant of emissions,” explains Dr Chaiechi, who is also the Australian Director at the Centre for International Trade and Business in Asia (CITBA).
“Carbon leakage has been the by-product of the EU emissions trading system, which unfortunately has led to a significant increase in greenhouse gas emissions globally. Therefore, CBAM has been introduced to combat this phenomenon.”
The CBAM reporting systems are set to start as early as 2023, with the entire CBAM regime aiming to become fully operational by 2026. So, what will this mean for the North?
“CBAM initially applies to carbon-intensive products such as cement, iron and steel, fertilisers, electricity and aluminium,” continues Dr Chaiechi.
“For Australia, this means that emission-intensive exports, which roughly account for 5% of the total export value, may be hit with a sizable tariff, especially if our production methods remain unchanged.
“However, initiatives like this could unlock North Queensland’s renewable energy potential and turn the region into a major renewable energy exporter.”
As recent as June 2022, 21.2% of the electricity used in Queensland is produced from renewable energy sources, with the official target set to reach 50% renewable energy in Queensland by 2030.
“This certainly puts us on the right track; however, more concentrated efforts are required if we want to seize international opportunities and become a renewable energy exporter,” adds Dr Chaiechi.
“These efforts range from significant infrastructure planning expertise in key areas and ensuring a greener footprint for all activities within the state.
Dr Chaiechi says education for current and future business leaders is critical and believes James Cook University’s MBA program, Graduate Certificate in Project Management and soon-to-be-launched Graduate Certificate in Economic Resilience will help develop generations of responsible leaders.
“Through our programs, we actively engage in the implementation of the six Principles for Responsible Management Education (PRME) in curricula, research, partnerships and student and staff engagement in alignment with the UN’s Sustainable Development Goals,” says Dr Chaiechi.
“Our future leaders must be equipped with the skills and expertise required to tackle the significant challenges of our times, such as climate change.
“They should be able to navigate complex environments and competitive markets to devise effective solutions for a more equitable and sustainable world.”
To learn more about James Cook University’s graduate programs, click HERE.