G7 should opt for import tariff on oil and gas from Russia – researchers
Clean Energy Wire
The G7 leaders should agree on import tariffs on Russian oil and gas at their summit in Elmau, according to researchers from the economic institute IfW Kiel. "A tariff reduces Russia's revenues and increases the G7's revenues, thus cushioning the burden of high energy prices on citizens," said trade researcher Alexander Sandkamp. Russia would have to sell its energy at a lower price to stay competitive, which would make sense as a further sanction that hits Putin’s regime in the short term. Currently, Russia is compensating for falling export volumes with the rising prices, the researchers write.
"Tariff revenues can be used to cushion social hardship with repayments via energy subsidies." Moreover, a tariff maintains the incentive to save energy, which is both appropriate in the current situation and in line with climate goals, Sandkamp says. In contrast, a price cap below the world market price, as proposed by U.S. Treasury Secretary Janet Yellen, would further fuel demand for energy because it would make energy cheaper and mask the real shortage.