A “Green Trade War” On The Horizon?

The idea of “carbon tariffs” has some European countries worried, according to Roger Greenway, editor of ENN, who noted in an article today that “they are concerned that carbon tariffs could be used [in the future] to fend off competition from countries which have not committed to reducing emissions, in effect triggering a green trade war.” In what countries like the US and France are calling “border measures,” developed nations could, in theory, hold another nation’s lack of carbon reduction pledges and legislation against it, and impose tariffs on a country until such legislation is introduced and enacted successfully. This move is supposed to “secure the competitiveness of European industry against emerging economies” and counteract the recent phenomenon of countries outsourcing to nations that have no carbon reduction plans to save money on industry.

France has been the only European Union member state to openly rally for the introduction of border measures, and introduced the idea to the EU in 2008 while it was discussing its emissions trading plans. In the meantime, the EU is currently granting “free emissions ‘permits’ to industries which might be tempted to relocate to areas with less stringent regulations.”

The US is dealing with things similarly, with the House of Representatives allowing a provision to a draft of a climate bill that would allow a kind of carbon tariff on countries who don’t limit emissions after 2020. President Obama was opposed to this action, concerned that in this tough global economy it is important not to discourage trade.

What do you think? Comment.

by M. Molendyke

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