Past blog discussions on trade measures designed to promote environmental protection have focused on proposals by Joseph Stiglitz and various EU officials (see here, here, here and here). Now it seems that the U.S. is getting into the act.
Retaliatory steps that comply with world trade rules could be found against China and India if they fail to help international efforts to cut emissions of carbon dioxide, a senior U.S. diplomat said on Tuesday.
Speaking before a meeting on climate change in Washington to be attended by the world's 16 biggest greenhouse gas emitters, U.S. ambassador to the European Union C. Boyden Gray said steps could include a tax on carbon emitted by manufacturers.
Gray said it was vital to get China and India on board in reducing emissions.
"We just can't do without them," he told a news briefing.
"I think there are mechanisms that could be retaliatory ... that could be utilised if China and India don't engage.
"You could probably find a WTO-compliant way -- for example you could require goods to have to pay a fee related to the carbon expended in manufacture," he said.
It's a little unclear to me what is meant by this. If it's a measure that targets only Chinese and Indian goods, that is clearly a problem under WTO rules. On the other hand, if it's a general charge on all goods based on the carbon emissions from their production process, that would be easier to do consistently within the rules, although there would still be some challenges.
