European Union Considers Imposing A “Carbon Border Tax”

If the climate cultists in the E.U. government are considering doing it, that means that they are going to do it

The E.U.’s looking at a ‘carbon border tax.’ What’s a carbon border tax?

The incoming European Commission president, Ursula von der Leyen, was elected on a promise to deliver a “European Green Deal.” A key component of her agenda is a carbon border tax.

What exactly is a carbon border tax, and what are its consequences for the global fight against climate change? This is what you need to know.

Slowing global climate change will require reducing carbon emissions from a wide variety of sources. To do that, some countries have introduced carbon pricing plans to make carbon use more expensive and help the economy transition to zero carbon emissions. A carbon pricing plan could take the form of a standard tax on carbon emissions or a cap-and-trade system.

But not all countries want to tackle climate change at all — let alone set prices on emitting carbon. A carbon border tax, also known as a border carbon adjustment, imposes a fee on any product imported from a country without a carbon pricing plan. Hypothetically, the tax would adjust the price of the imported goods to be equal to those produced at home.

And then the country being hit with the import tax fires back with import taxes against EU nations.

First, these tax adjustments could solve the problem of carbon leakage — when carbon-intensive industries such as heavy manufacturing move to countries that don’t regulate carbon emissions.

So when will the EU give up building stuff, including fossil fueled vehicles?

Second, they might help countries that want to lead on climate policy use their market power against those that don’t. Some observers hope that such taxes would encourage more countries to participate in global climate agreements. It might also help enforce these agreements by raising the cost of shirking on a deal.

Or, companies can just decided to raise the price of their products to offset the cost of the carbon tax.

Third, border adjustments can affect internal climate discussions. In principle, they level the playing field between companies in countries with climate policies and those elsewhere. As a result, they allow politicians to say they are protecting the competitiveness of domestic companies.

Wait, hasn’t the Washington Post, along with all the Trump haters, say it was Bad to use tariffs to protect U.S. companies? Regardless, it would mean that those EU companies would end up paying more to compete in markets without carbon taxes, as they will surely be penalized.

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One Response to “European Union Considers Imposing A “Carbon Border Tax””

  1. ns says:
    I hope the link works. China now uses more coal than the rest of the world combined. (h/t to Instapundit for the link)
    I have no idea if the EU will impose the border tax on China or not, if it is enacted.

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