Beware the proponents of carbon tariffs

Anyone supporting carbon tariffs as a promising substitute for true border carbon adjustments with national carbon pricing should ponder a new article in Foreign Affairs magazine by Senator Bill Cassidy (R-LA), a leading proponent of carbon tariffs. 

The title of the article—almost certainly chosen by the editor, not the author is “A Tariff for the Climate.” That sounds promising but is highly misleading. Cassidy occasionally pays lip service to protecting “the environment” and preventing “pollution,” but his overt goal is bashing China and prolonging the life and prosperity of the U.S. oil and gas industry, a powerhouse in the state he represents.

Consider his lead sentence: “China is challenging the United States militarily, geopolitically, and economically. These challenges are connected, and the right response must address all three. The answer is a single new policy: a foreign pollution fee.”

He goes on, "To counter China, the United States should make use of a clear competitive advantage—its ability to produce with comparatively low greenhouse gas emissions. . . This is why I will be submitting legislation calling for a foreign pollution fee. The fee is not a domestic carbon tax. It does not prevent the continued use of U.S. natural resources.”

Cassidy also bashes genuine carbon pricing systems. “The foreign pollution fee is not intended to be a protectionist policy in the manner of the European Union’s Carbon Border Adjustment Mechanism, which indiscriminately taxes certain imports,” he writes.

Anyone who thinks his carbon tariff will be a backdoor way to curb fossil fuels should consider his statement under the sub-head “America’s carbon future”:

“To successfully implement a foreign pollution fee, the United States must continue to develop its natural resources. The rise of domestically produced natural gas is the primary driver of U.S. emission reduction since 2005. The U.S. Energy Information Administration projects that the United States’ use of liquid fuels and natural gas will increase at least through 2050. There is every reason to believe that carbon fuels will be central to U.S. and global economies long after that. Domestic production of oil and natural gas strengthens the United States’ geopolitical position, increases its national wealth, and provides hundreds of thousands of American jobs. Moreover, U.S. fossil fuel production has a lower carbon footprint than its counterparts abroad. To give away all these advantages is irrational.”

The bipartisanship that CCL rightly hopes to cultivate must be based on some shared understanding of the need for climate mitigation. I fear that many proponents of carbon tariffs have a long way to go in that regard.

4 Replies
Ray Welch
96 Posts

@Jonathan Marshall, thanks for calling this out. It's seductive, the idea of the Republican Party offering a carbon tariff. Common ground, right? A first step toward bipartisan carbon pricing? Sounds good.

Except it isn't. 

If Cassidy succeeds in using the fear of China to pass this hostile and mercantilist carbon tariff, he'll succeed in nipping a national carbon price in the bud. Once it was in place, there would be zero leverage to bring fossil fuel interests to the table to support a domestic carbon price. This is naked fossil fuel advocacy hiding behind a bipartisan loincloth. 

CCL might use this opportunity to engage, but the first thing it should say in response, after thanking the senator for his interest in reducing carbon pollution, is that a domestic carbon price must be part of the package. Natural gas can't be a permanent feature of our energy future. You don't reduce GHG pollution by creating more of it.
 

There are some good statements in the article, for example,

the fee will create an incentive for other countries to engage in clean manufacturing, making low-emission production economically justifiable for everyone …

If the fee works as it should, a country such as Vietnam could outcompete China as a low-cost manufacturing destination—not by imitating substandard Chinese environmental practices, but by embracing sustainable development.

And it discusses the issue of carbon leakage, and acknowledges the problem of climate change. While its critique of the EU CBAM as being ‘indiscriminate’ and such is a bit odd, Senator Cassidy is correct that it doesn't provide assistance for developing countries. I wonder if his bill will.

In any case, I find a lot to like here.

@Dana Nuccitelli @Ray Welch One important point I failed to make clearly is the importance of how climate policies, including CBAMs or carbon tariffs, are framed. The climate crisis is global in scope and will require global cooperation to resolve. Framing policies as weapons against the world's largest carbon emitter--which also happens to be one of the world's preeminent developers of clean technology--is not a fruitful way to build international consensus of this issue.

As US climate envoy John Kerry has said, climate is a “universal issue” that must be decoupled from other national rivalries. He attempted, unsuccessfully, in talks with Chinese officials this summer to rebuild trust that was shattered by House Speaker Nancy Pelosi's decision to visit Taiwan last year.  

For his troubles, Kerry was denounced by Rep. Mike Gallagher, R-Wisc., for “getting in bed with Beijing.” Gallagher, who chairs the House Subcommittee on China, condemned Kerry for believing "we need to cooperate with China when it comes to climate change.”

Climate activists who share Kerry's belief need to discourage policy discussions, like those of Senator Cassidy, from devolving into divisive China bashing. The same considerations of respect that motivate CCL's bipartisan approach to policy promotion in Washington should apply to the international arena. Policies relating to carbon border adjustments should be considered on their climate and economic merits, not on their suitability as weapons of national competition.

Ray Welch
96 Posts

@Jonathan Marshall @Dana Nuccitelli , Framing is important. It's one thing to explain how a CBAM favors the US over China because of our cleaner manufacturing profile, and quite another to make disadvantaging China the main policy goal. The primary purpose of a CBAM is to get countries to reduce their domestic carbon emissions. I'm concerned that Cassidy's pitch is inviting a tariff war rather than carbon reductions.

Underlying all of this is a big risk.  If the US could somehow get the international community to countenance a US CBAM based on GHG regulations and not a domestic GHG price, then China will press for the same.  Rather than being a stepping stone toward CCL's central policy goal--an annually escalating, socially just carbon price, exported to the rest of the world--a CBAM like Cassidy's will sharply reduce the chances of a price ever being implemented, let alone exported. His non-price-based CBAM will backfire, as China will claim the sovereign right to be treated the same as the US--that is, to have GHG regulations that allow fossil fuels (particularly NG) to stay in place and even grow. Result: negligible incremental GHG reductions anywhere.

Cassidy's interest in a CBAM is great. It may be an opening for discussions that include carbon pricing. But his statements are clearly aimed at avoiding carbon pricing, especially as it pertains to natural gas. If CCL is in a position to discuss a CBAM with Cassidy and others who support his price-free proposal, that would be excellent. But there's a real risk to agreeing to his proposal as framed, relative to our main policy goal.
 

Forum help

Select a question below

CCL Community's Sitewide Forums are an easy and exciting way to interact with other members on CCL Community.  The Sitewide Forums are focused on subjects and areas of general interest to members.  Each forum consists of topics that members have posted, along with replies from other members. Some forums are divided into categories to group similar topics together. 

Any members can post a topic or reply to a topic.

The Sitewide Forums are open to the entire CCL community to create, comment on, and view online discussions.  Posts and comments should address the subject or focus of the selected forum. 

Note: Categories can only be created by community administrators.

Guidelines for posting: (also see general Community Guidelines)

  • Don’t see your question or topic? Post it.
  • Be thoughtful, considerate (nonpartisan) and complete. The more information you supply, the better the better and more engaging the conversation will be. 
  • Feel like cursing? Please don’t.
  • Ask yourself, “Would my topic post reveal sensitive or confidential information?” If so, please don't post!

Flag/report any offending comments, and then move on. In the rare instance of a comment containing a potentially credible threat, escalate that immediately to CCL.

If the Sitewide Forum has no categories, select the "Add Topic" button at the top of topics window. 

If the forum has categories, when you click on "Add Topic," a dropdown list of the categories appears. Select the desired category and then "Add Topic."
In either case this brings up a box to enter both the topic subject and topic text.

If you have questions or wish to add comments on a posted forum topic, open the post and click the blue “Add Reply” button at top. You can also click on the “Reply” link at the bottom of the original topic posting.

This opens a text box. Add your reply. You can also add documents by dragging a file into the text box. Click “Post” at the bottom of the reply window This will add your reply to other replies (if there are any), sorted by oldest on top. 

If, however, you want to reply directly to someone else’s reply, click on the “Reply” link at the bottom of their reply. 

When replying to a topic post or a topic reply it may be helpful to quote the original text, or the part that your reply is referring to. To quote a topic or reply, click on the "Quote" link at bottom of post. 

When you do this the full text of either the post or reply will be pulled into a reply text box. If desired, you can remove parts of the quoted text in order to get the portion you are interested in quoting.

You can subscribe to notifications of new postings from any of the Sitewide Forums or forum categories. To subscribe, select the green “Subscribe” button at the top of the forum. Click on dropdown arrow to select frequency of notification.

If you are already subscribed, the button will display “Unsubscribe.”  Select it to unsubscribe or select the dropdown arrow to modify frequency of notification. 

Note: If you subscribe to a Sitewide Forum, such as "Media Relations" that has categories (such as "LTEs and Op-Eds"), you will also be subscribed to all the categories. If you wish to subscribe to only one or more of the categories, unsubscribe to the parent forum and subscribe individually to desired categories.

.

If you see a topic post or reply that interests you or that you like, you can click the “Like” icon at the bottom of the topic post or the reply. This lets the poster know that the topic was helpful. It also contributes to the topic’s popularity, which influences where it is listed in the "Popular" forum tab. There are also additional reactions available for members to use. Mouseover the "Like" icon to choose one of these options: Love, Clap, Celebrate, Insightful, or Interesting.

CCL Community Guidelines

  • Discuss, ask and share
  • Be respectful
  • Respect confidentiality
  • Protect privacy

More guidelines
 

CCL Blog Policy Area Categories