Lee Jae-myung: "Delaying Response to Carbon Border Tax Means Mutual Destruction... Let's Introduce Basic Income Carbon Tax"

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, argued that advanced countries such as the United States and the European Union (EU) are rushing to introduce a 'carbon border tax,' and that we must also hasten the introduction of a 'basic income carbon tax.'

The carbon border tax is a system that imposes a tariff-like tax proportional to the amount of carbon dioxide emissions on products that emit greenhouse gases during the manufacturing process when they are exported. The EU recently decided to impose a carbon border tax starting in 2026, after a three-year grace period, on exports of steel, cement, fertilizer, aluminum, electricity, and other products to the EU.

Governor Lee said, "A few days ago, the EU decided to introduce a carbon border tax from 2023 through the 'Fit For 55' initiative, and news has emerged that the U.S. Democratic Party is also pushing for the introduction of a carbon border tax," adding, "The Democratic Party has prepared an infrastructure budget of $3.5 trillion (about 3,992 trillion KRW) and decided to include a plan to impose taxes on imports with high carbon emissions."

He explained, "If the carbon border tax is introduced, Korean companies will inevitably be hit hard because countries with policies less stringent than the importing country's greenhouse gas regulations must pay additional tariffs."

He continued, "The Korea Institute for International Economic Policy recently estimated in a report that if the EU imposes a carbon border tax on non-metallic mineral products and primary steel products, Korean steel exports will decrease by 11.7%," adding, "An accounting firm forecasted in a report released earlier this year that if the EU imposes a carbon border tax of $30.6 per ton in 2023, the steel industry will have to pay about $141.9 million (approximately 160 billion KRW) in carbon border taxes."

Therefore, Governor Lee advised the government to respond actively, saying, "A rapid transition to a low-carbon system is the only way to maintain national competitiveness," and "If we are half a step late, we will have to pay enormous costs, but if we are half a step ahead, we can reduce huge costs and turn the crisis into an opportunity to lead the world."

He also introduced, "For companies to have sustainable industrial competitiveness, fossil fuels must eventually be banned. Since mandatory allocations are not possible, carbon tax introduction is necessary. However, imposing a carbon tax causes inflation and tax resistance. But if all or part of the carbon tax revenue is distributed equally to all citizens, energy transition can be achieved effectively without tax resistance. Switzerland is a representative case of introducing a (basic income carbon tax)."

Furthermore, he promised, "We do not have much time left," and "We must turn the crisis of a great transition, with crises approaching us moment by moment, into an opportunity for transformative growth. I, Lee Jae-myung, will carry out the courage, determination, and strong drive necessary for this."

This content was produced with the assistance of AI translation services.