The other day Joel posted about the suggestion by Joseph Stiglitz that the EU should impose trade barriers on the U.S. to coerce a change in U.S. environmental policy. Now I see that Jonathan Adler, over at the Volokh Conspiracy, has posted about a similar proposal:
[according to a report], the European Union may consider adopting a "border tax adjustment" on imports from countries that do not impose domestic caps on carbon dioxide emissions. The idea is to reduce some of the costs of the EU's emission trading scheme.
The "report," or a description of it anyway, is available here: http://www.euractiv.com/en/sustainability/eu-moots-border-tax-offset-costs-climate-action/article-158641. As stated there:
Commission advisors are considering slapping a tax on imported goods from countries which do not impose a CO2 cap on their industry, according to a draft paper seen by European Voice (5-11 October).
The paper will be presented to a top group of industrialists, member-state and civil- society experts who help the Commission shape policies in the field of environment and energy - the high-level group on competitiveness, energy and the environment.
The idea, known in academic circles as a "border tax adjustment", is understood to have emerged from expert discussions on long-term energy scenarios at a September meeting of the competitiveness sub-group.
According to the Voice, cement is cited in the paper as "a good product to trial this approach".
On the other hand, it is noted:
not everyone at the Commission is supportive. One senior source, who preferred not to be named, said it would not be a good idea "politically".
In addition to the "political" problems, of course, are the "legal" ones. This plan seems to have the advantage that it does not necessarily target a particular country, like Stiglitz seemed to, but it's still going to be tough to get it through GATT Article XX.
