This report calls for coordinated, targeted government intervention from key industrial economies across the Asia-Pacific to correct the persistent global market failure of unpriced emissions in the production of fossil fuel-intensive commodity processing required to achieve net zero. The report argues that this should take the form of an Asian Carbon Border Adjustment Mechanism (CBAM) and that Australia is well positioned to take a leading role in its development. 

To achieve this, a set of orchestrated support measures will form the critical policy pillars required to catalyse industrial decarbonisation and electrification, including in steel, aluminium and cement supply chains. This will elevate global climate ambition and position Australia and its key trading partners to leverage the clean commodity transformation that will rapidly emerge in a decarbonised global economy.  

Recommendations

1. Progressively rising domestic price on carbon.
2. Carbon Border Adjustment Mechanisms.
3. Strategic support to scale clean commodity production.
4. International collaboration, including orchestrated market incentives and an Asian CBAM.