Carbon border adjustment mechanism would bolster US performance in global market | Opinion
On June 2, Kevin McCarthy, leader of the Republican Party in the House of Representatives, announced a conservative program for engaging with energy, climate and conservation with six policy pillars. Two of these pillars, “American Innovation” and “Beat China and Russia,” dovetail perfectly with an initiative known as a carbon border adjustment mechanism.
A CBAM would set an import tariff on certain internationally traded goods — carbon-intensive products like steel, paper, cement and fossil fuels. One version of this tariff would establish a domestic price on carbon emissions, requiring countries without such a price to pay a fee. Another version would base the tariff on average emissions, so domestic and foreign companies that emit more than the average would pay. Both strategies would incentivize U.S. industries to increase their efficiency, invest in new technology and reduce carbon emissions. They would also bolster America’s performance in the global market, for at least two reasons.
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First, a CBAM would monetize the carbon reduction innovations that American businesses have made and will make in the future. This would give us an advantage when competing with countries like China and Russia, whose economies are much less carbon-efficient than our own. According to a 2021 study commissioned by the Climate Leadership Council, goods produced in America are “40% more carbon-efficient than the world average,” and the U.S. economy overall is 4.2 times as carbon-efficient as that of Russia, and 3.2 times as carbon-efficient as that of China.
Second, the European Union plans to initiate a carbon border adjustment in 2023, setting a fee on cement, steel, iron, aluminum electricity, and fertilizer by 2025 or 2026. For any of those products, U.S. businesses exporting to Europe may have to pay a tariff, depending on how their carbon footprints compare with those of the EU. Canada is also considering a CBAM. Together, the EU and Canada account for about $1.8 trillion of trade for the U.S., so if we do not initiate our own CBAM, we may place ourselves at a disadvantage when our trade partners do.
Thus, a CBAM would promote at least two pillars of McCarthy’s program. It would reward and incentivize “American Innovation,” and it would help us “Beat China and Russia” in the global market. Regarding the latter point, Republican Sen. Kevin Cramer argued that this measure “would cut global greenhouse gas emissions, increase energy security, and reduce Russia’s power to coerce Europe.”
Regarding innovation, Republican Sen. Bill Cassidy stated, “If we had a border carbon adjustment, it would help our workers, help our industry, incentivize them to do it right.” Therefore, both Republican leadership and their policy pillars support a CBAM. This same measure would also help us meet the Biden administration’s 2030 target for emissions reductions.
CBAM is one example of an initiative that coincides with the environmental values of both conservatives and liberals in America, providing common ground for swift and effective action for the welfare of our economy and the planet. Although finding ways to conform a CBAM to the guidelines of the World Trade Organization may be difficult, there is widespread and bipartisan recognition of this initiative’s benefits, which should provide sufficient political will to overcome those hurdles.
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Citizens’ Climate Lobby volunteers have encouraged their members of Congress to pursue American innovation and climate action. Volunteers met with the offices of Sens. Marsha Blackburn and Bill Hagerty and Reps. David Kustoff, Steve Cohen, Diana Harshbarger, Jim Cooper and Mark Green. We met with Rep. Tim Burchett, and we will meet with the offices of Reps. Chuck Fleischmann and John Rose. Whether they advocate for the CBAM or for other forms of environmental legislation, there are abundant opportunities to support helping our communities and our planet flourish.
Noah Guthrie is an undergraduate at Berry College and a member of the Middle Tennessee chapter of the Citizens' Climate Lobby.
This article originally appeared on Nashville Tennessean: Carbon border adjustment mechanism would bolster US performance
