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BRUSSELS, June 13 (Reuters) - The Group of Seven leaders onSunday pledged to work together to tackle carbon leakage, weeksbefore the European Union is due to propose a world-first planto impose CO2 emission costs on imports of certain pollutinggoods.
As large emitters such as the EU wrestle with how to meettargets to cut CO2 emissions drastically and quickly, concernsare rising about so-called carbon leakage - the risk that toughclimate policies could cause companies to relocate to regionswhere they can continue to pollute cheaply.
"We ... acknowledge the risk of carbon leakage, and willwork collaboratively to address this risk and to align ourtrading practices with our commitments under the Parisagreement," G7 leaders said on Sunday in a joint communique.
The leaders said policies to put a price on CO2 will helpthem decarbonise their economies.
They steered clear, however, of mentioning carbon borderfees - an idea set to take centre stage next month, when the EUwill propose its long-awaited plan to force importers to pay fortheir emissions.
A draft of the EU policy would require importers of iron andsteel, aluminium, cement, fertilisers, and electricity to buydigital certificates to get their goods over the EU border. Eachcertificate would represent a tonne of CO2 emissions embedded inthe goods.
"Carbon pricing matters. We need to address carbon leakageto create (a) global level playing field," European CouncilPresident Charles Michel said in a tweet after the G7 meeting.
Brussels says the policy is needed to put EU firms on anequal footing with competitors in countries with weaker climatepolicies.
However, it has stoked opposition from countries includingRussia, for whom it could make access to the EU market moreexpensive for certain goods.
It could also hit some G7 members. The draft proposal wouldapply to some goods Britain and the U.S. sell into Europe,including steel and fertilisers.
Brussels has said countries with sufficiently ambitiousclimate policies may be able to dodge the fee.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^UPDATE 4-Where's the detail G7 nations agree to boost climatefinance
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Kate Abnett and Elizabeth Piper;Editing by ElaineHardcastle) ((Kate.Abnett@thomsonreuters.com;))
