The Washington Post explains the details of the Waxman-Markey energy bill and argues that such tariffs are unnecessary:
... American firms that pay in order to comply with mandatory limits on carbon emissions would be at a disadvantage competing against foreign outfits whose leaders aren't as environmentally conscious.
But this measure is redundant. The bill already provides ample compensation to "trade-vulnerable industries" through at least 2026, devoting as much as a whopping 15 percent of allowances -- valuable pollution rights created under the bill's cap-and-trade regime -- to shelter firms from foreign competition.
The details of this rebate scheme leave ample room for overpayment. And because rebates are based on firms' historical output, argues Michael Levi of the Council on Foreign Relations, manufacturers might have even an incentive to scale back or close down and simply collect the cash. Better to head off these problems, Mr. Levi argues, by aiming to compensate U.S. firms for 75 percent of their compliance costs instead.
The tariffs, meanwhile, are meant to kick in if the rebates don't level the playing field enough. But they are questionably designed. The bill instructs regulators to apply tariffs to foreign exporters if the emissions per unit of their industrial sector back home are greater than that of the same sector in America. That makes no distinction between the carbon footprint of the goods countries export and those they consume domestically. More efficient exporters could get punished.
