[CTC] Democrats to Propose a Border Tax Based on Countries’ Greenhouse Gas Emissions

Mon Jul 19 13:21:35 PDT 2021

Sierra Club statement below...

https://www.nytimes.com/2021/07/19/climate/democrats-border-carbon-tax.html?action=click&module=Top%20Stories&pgtype=Homepage <https://www.nytimes.com/2021/07/19/climate/democrats-border-carbon-tax.html?action=click&module=Top%20Stories&pgtype=Homepage> 

Democrats to Propose a Border Tax Based on Countries’ Greenhouse Gas Emissions
Senators will introduce a plan on Monday to tax iron, steel and other imports from countries without ambitious climate laws.

Updated 3:05 p.m. ET

WASHINGTON — Democratic lawmakers on Monday will make public a plan to raise as much as $16 billion annually by imposing a tax on imports from China and other countries that are not significantly reducing the planet-warming pollution that they produce.

The tax would be levied regardless of whether Congress passed new laws to reduce emissions created by the United States. It would be designed to be approximately equivalent to the costs faced by American companies under state and federal environmental regulations.

Experts said a border carbon tax would almost certainly provoke America’s trading partners and could create serious diplomatic challenges ahead of United Nations climate negotiations set for November in Glasgow.

But Senator Chris Coons of Delaware and Representative Scott Peters of California, Democrats who intend to announce the plan on Monday, said American companies deserved protection as the Biden administration moved forward with aggressive policies to reduce greenhouse gas emissions caused by burning fossil fuels.

“We must ensure that U.S. workers and manufacturers aren’t left behind and that we have tools to assess global progress on climate commitments,” Mr. Coons said.

Climate Fwd  There’s an ongoing crisis — and tons of news. Our newsletter keeps you up to date. Get it sent to your inbox.

The plan comes a week after the European Union proposed its own carbon border tax on imports from countries with lax pollution controls.

The proposal from Democrats, which Senate aides said was developed with input from the Department of the Treasury, the Office of the United States Trade Representative and other parts of the Biden administration, is expected to be attached to a $3.5 trillion budget resolution.

The White House did not respond to a request for comment on the legislation or say whether the administration endorsed it. But President Biden and administration officials have said they support a carbon border tax as a tool to advance climate goals.

Democrats hope to pass their budget package later this year and use it as a way to expand social, educational and health care programs as well as fund a transition to clean energy transition and cut greenhouse gas emissions. The decision to package the proposals in a budget reconciliation bill would allow Democrats in the sharply divided Congress to pass the measure without any Republican votes.

A handful of Republican lawmakers have explored a carbon border tariff as a way to counter China and protect U.S. industries.

But Senator John Barrasso of Wyoming, the top Republican on the Senate Committee on Energy and Natural Resources, called the $3.5 trillion blueprint a “freight train to socialism” and said Democrats’ plan for a border tariff would start a trade war.

“They’re proposing a border tax because they know punishing regulations and taxes will drive U.S. businesses overseas,” Mr. Barrasso said in a statement. He said the United States should instead work on making energy “cleaner and more affordable.”

Mr. Barrasso’s state is a major producer of coal, natural gas and crude oil, the burning of which produces the carbon emissions that scientists say are driving climate change.

A border tax is typically designed to even out the burden for a nation that has imposed a tax or price on carbon dioxide emissions. Companies abroad that want to sell iron, steel, aluminum or other commodities to the United States would be required to pay a price for each ton of carbon dioxide they emit in making their products, which would erase any competitive advantage. The hope is that it will encourage other countries to also price carbon and drive down emissions.

It also is considered a way to prevent American companies whose manufacturing processes emit heavy amounts of carbon pollution from relocating to countries with looser environmental rules, a phenomenon known as leakage.

Under the Democratic proposal, a tariff starting in 2024 would apply to roughly 12 percent of imports coming into the United States. It would cover petroleum, natural gas and coal as well as products that have a large carbon footprint like aluminum, steel, iron and cement. The list of covered goods could expand as the United States improves methods of calculating the carbon intensity of different products.

It is estimated that it will raise between $5 billion and $16 billion annually, aides to the lawmakers said.

A carbon border tax does threaten to make items made with imported products — everything from medical devices to automobiles to appliances—- more expensive for American consumers if foreign companies raise their prices, said David Weisbach, a professor at the University of Chicago Law School and an expert in carbon border tariffs. Senate aides argued that the legislation is designed to avoid causing price hikes across goods by taxing only limited items at first.

Mr. Coons said he intended the tariff to act as a “complement” to the new climate policies that Democrats intend to pass in the budget package, like a mandate to require as much as 80 percent of U.S. electricity to come from low or zero-carbon energy sources.

“We have a historic opportunity to demonstrate that climate policy goes hand-in-hand with providing economic opportunities as U.S. innovators develop and scale clean energy technologies,” he said.

Mr. Biden has pledged to cut U.S. emissions roughly in half by 2030 and reach net-zero emissions by 2050. The United States, however, does not tax industries for the carbon they produce. Political analysts say it is unlikely the Congress will enact a carbon tax for domestic manufacturers and utilities in the near future.

Instead, the plan calls for federal agencies to calculate the environmental cost incurred from complying with “any federal, state, regional or local law, regulation, policy or program” designed to reduce emissions.

That could refer to things like the regional cap-and-trade systems that 13 states have adopted; state renewable fuel or electricity standards that promote clean energy use; or even the burden of complying with federal regulations under the Clean Air Act.

“I’ve never seen a border adjustment that adjusts for regulatory costs,” Mr. Weisbach said. “That’s going to be hard to do.”

Another complication is that while the poorest countries would be exempt from paying the tariff, it would be up to U.S. agencies to determine whether trading partners are enforcing climate change laws “that are at least as ambitious as federal laws and regulations” to cut carbon.

Under the 2015 Paris Agreement the nearly 200 nations involved agreed to cut emissions — but in different ways. Some, like the United States and the European Union, vowed to cut emissions across their economies. Others, like Saudi Arabia, said they would reduce the expected growth of future emissions. China pledged to peak emissions “around” 2030. India said it would reduce the greenhouse gas intensity per unit of gross domestic product produced.

“There will be different views on how you do this,” said Michael Mehling, deputy director of the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology, who was consulted on the proposal by Mr. Coons’s staff.

But, he said: “It’s really good that they’re doing this. I think this conversation needs to be started about leakage. There’s no way we cannot deal with this topic.”

Lisa Friedman reports on federal climate and environmental policy from Washington. She has broken multiple stories about the Trump administration’s efforts to repeal climate change regulations and limit the use of science in policymaking. @LFFriedman

FOR IMMEDIATE RELEASE:
Monday, July 19, 2021
Contact: Carolyn Morrisroe, carolyn.morrisroe at sierraclub.org <mailto:carolyn.morrisroe at sierraclub.org>
View as webpage <https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUT2nbbQoQDISK9PHPb19dQM4vnsYbeZgfe0T1D8slts-2Fynh1bwalnBQcMFCcx7XHxU7FQ7o8D1-2BvdH0aI9OdKUk-2By1HuAYSVOlqbtK8wUsMIdZFv6vq4Be1RdMsrAT88eykZese6l2fYNdPRKEpL1lc-3Dlcna_FlqIZvbrrp5gV6Ykgns-2FX-2BdOpBOv-2BeY0ai0HYfFxQCCYNnnWVWesfTRpWXJFLEba3rWbGQr0oDwb4nQmn-2BGyqX2RoTtM1uE-2FyXjjEzvOOs4ABZctmDKq3d1g0EnZDdjy1i7HAaNTTjo7ZojZn4f0cVZDHKoeei9CBScFTqoeYq3onLIjOshgrlWrw4l7hLRR7CZCmnubpI08X1QyCXkqDdeo3SiV0o8ATsAkVjCVdqjl3KBqvKk1pPZSbsufl92qdQtTMs-2BXU4lOm4YBZEyfHuptuQ7hBXASzLEQ2kBbPQpwXdRyyVEjSH7QX2rT2nIVKKtURWjBl3XTFAy2T7yPR22l-2Bl5fsP-2BfH-2FKT0-2BsaO0c-3D>
Sierra Club Welcomes Congressional Proposals for a Carbon Dumping Fee

WASHINGTON, D.C. -- Today, it’s reported <https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUaAj148gxPSN5UBbHqds6oPt3nK3-2FETBX3dKIOaC4rzN-2FjPsKkxi9jPyzqCAd5oBWBS7Z8P4-2F5kFNiuVWPK0Z2erJdPQEL2-2BQTM7Y1Evz2bvz-2FPejBFlShkax9u3gEFvNlrJLVLlUz1rZB5wPkUXVww4UJTteuICCnXymPogURA1MggY_FlqIZvbrrp5gV6Ykgns-2FX-2BdOpBOv-2BeY0ai0HYfFxQCCYNnnWVWesfTRpWXJFLEba3rWbGQr0oDwb4nQmn-2BGyqX2RoTtM1uE-2FyXjjEzvOOs4ABZctmDKq3d1g0EnZDdjy1i7HAaNTTjo7ZojZn4f0cVZDHKoeei9CBScFTqoeYq3onLIjOshgrlWrw4l7hLRR7CZCmnubpI08X1QyCXkqDbZGc-2FcvrJaNd11N4lacpmTrku7RX-2BkZE90FcmObxE-2B3EyfOPOuelTc-2BpFUtFqbUaFrGkhjqO-2BBMd80PSihYkUDgYaU7pfNd6503b4JCvg33c484AybBBrJ6GLWuaaeuK96vz-2FgusUWI8eB8qOmVVgg-3D> that Congressional Democrats will introduce legislation to impose a border tax on imported materials made with a high degree of climate pollution. 

For years, the Sierra Club has been calling for the establishment of a carbon dumping fee to encourage bold climate action across borders. Read our proposal for more details <https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUT2nbbQoQDISK9PHPb19dQODeJlfplj-2FoFl8kmS2jDiYGaXH9CIAwj8gF4YW2-2B7NrbTH5EnPHDSmwmZEb7iTw3E3tpqImHNIdhCMLC7FFR7NGMw88sK5WOHTuNTPE8q7hQ-3D-3D7m4t_FlqIZvbrrp5gV6Ykgns-2FX-2BdOpBOv-2BeY0ai0HYfFxQCCYNnnWVWesfTRpWXJFLEba3rWbGQr0oDwb4nQmn-2BGyqX2RoTtM1uE-2FyXjjEzvOOs4ABZctmDKq3d1g0EnZDdjy1i7HAaNTTjo7ZojZn4f0cVZDHKoeei9CBScFTqoeYq3onLIjOshgrlWrw4l7hLRR7CZCmnubpI08X1QyCXkqDan0Q90vcdz9NxASqFK5H4XGpoXAxtQ8Sp37dUNtQDvG-2B4-2BzrKrYdnTx-2BEbHZsg95lSLUNljs7E1A6O-2BJoePydKYYttivx6mnWgqz5en5MGJagNwchKYBeFXPN7xDiRtonaPhY22QufwB-2ByXEDiF8cs-3D> on how this fee should be designed.

In response, Sierra Club Living Economy Program Director Ben Beachy released the following statement:

“For decades, outdated trade deals have encouraged corporations to outsource their most polluting factories to countries with weaker climate and labor standards, spurring both job loss and climate pollution. A carbon dumping fee is one important tool in the toolbox to help reverse this global race to the bottom in climate standards. We are eager to see the details of this legislation, and we applaud the effort to craft new trade policies that help rather than hinder our historic fight to address the climate crisis. 

“A well-designed carbon dumping fee would create a strong incentive for corporations abroad to reduce emissions in order to sell iron, steel, aluminum and other products to the U.S. Similarly, U.S. corporations might press pause on outsourcing to countries with weaker climate and labor standards if they know they will have to pay a fee to sell the materials back in the U.S. It’s high time that we transformed our trade policies to support good jobs, manufacturing renewal, and climate action.”

###

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 3.8 million members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org <https://u7061146.ct.sendgrid.net/ls/click?upn=TeZUXWpUv-2B6TCY38pVLo9lC-2FvcdyjQDG2HcVkRYnueIYtvQlG2FCN2QqYk2Lk89k8kft_FlqIZvbrrp5gV6Ykgns-2FX-2BdOpBOv-2BeY0ai0HYfFxQCCYNnnWVWesfTRpWXJFLEba3rWbGQr0oDwb4nQmn-2BGyqX2RoTtM1uE-2FyXjjEzvOOs4ABZctmDKq3d1g0EnZDdjy1i7HAaNTTjo7ZojZn4f0cVZDHKoeei9CBScFTqoeYq3onLIjOshgrlWrw4l7hLRR7CZCmnubpI08X1QyCXkqDT68EUMMKg7g9Y-2BEWkfoUZHIW4PmViAyfzb7MzM1lq9pXCou7uH8bvljQeF0ilRj0ttzuhhI-2FscJpeY17j70Hvrux9glbTkHVHOi7lLHQ594kp1fAX3dXdGTLDQrSYSTHfIj4rTFP6M5efeV0OlouRY-3D>.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20210719/4e2d3111/attachment.html>