One day after China’s top climate official, Li Gao, requested that his country’s export sector be exempt from greenhouse gas emissions reductions, U.S. Energy Secretary Steven Chu announced the possibility of levying a carbon tariff on countries that do not match US greenhouse gas emissions restrictions.
Chu told a House science panel that such border tax adjustments could “level the playing field”.
That statement heard ’round the Beltway signaled a growing uneasiness among politicians that the costs imposed by future climate change laws could put U.S. businesses at a competitive disadvantage and send energy-intensive industries fleeing the United States for countries that don’t have similar restrictions.
The implications both worry climate experts and raise the specter of a trade war, a fear that U.S. officials meeting with their international counterparts in Europe this week have been trying to diffuse.
Climate scientists fear that uncoordinated greenhouse gas reduction efforts will result in carbon leakage – the increase in greenhouse gas emissions in one country as a result of a decrease in another – which would simply redistribute rather than reduce climate changing emissions.
In politics, however, economics is a powerful motivator. In Washington, fears that carbon leakage will put the U.S. at a competitive disadvantage are prompting industry leaders to address “leakages”, through an import tax or other measures.
