Enormously Complex Managed Trade
Please note Tariffs to Tackle Climate Change Gain Momentum.
Policy makers on both sides of the Atlantic are looking at targeting steel, chemicals and cement. The tariffs would give a competitive advantage to manufacturers in countries where emissions are relatively low.
Economists and policy makers have been exploring the idea of carbon tariffs over the past 20 years, to level the playing field for domestic companies and to encourage trading partners to toughen their own emissions rules. When Yale University economist William Nordhaus accepted the Nobel Prize for his work on the economics of climate change in 2018, he proposed a global "climate club" of low-polluting countries that would impose a 3% tariff on imports from higher-polluting non-club members.
The European Union has taken the lead in carbon tariffs, unveiling its proposed plan in July. It currently has a cap-and-trade system in which domestic companies must obtain a permit to emit carbon, capped at a set amount. Permits currently change hands for around 60 euros, or $68, per metric ton of emissions.