Republican officials made the case yesterday for a climate-focused trade policy centered on carbon border fees.
Referring to it as an “America First energy policy,” Sen. Kevin Cramer (R-N.D.), said he’s trying to soften up his conservative base to the idea of taxing carbon-heavy products from China and Russia.
“I think this is a safe place,” he said during a discussion yesterday at the Bipartisan Policy Center think tank. “This is a policy that provides a landing pad for the first step, or at least the next step toward perhaps bigger things.”
The discussion expanded on an opinion piece Cramer co-wrote in December with former President Trump’s national security adviser H.R. McMaster, who also participated in yesterday’s discussion. In it, they argued that a joint trade policy between the U.S. and the European Union that would slap a common fee on carbon-intensive goods from countries with low environmental standards could benefit U.S. geopolitical interests.
The issue of climate in trade policy has come increasingly to the fore in recent weeks as the threat of a Russian invasion into Ukraine buffets energy markets in Europe. Military escalation could potentially cut off already low supplies of natural gas between Europe and Russia, which supplies nearly 40 percent of the continent’s gas.
The U.S. has jumped in to try and fill the supply gap by boosting supplies of liquefied natural gas to Europe (Climatewire, Feb. 9).
Cramer said he spoke with European Energy Commissioner Kadri Simson about the U.S. providing more gas to the continent, and he said he regularly raises the idea of border carbon fees with foreign leaders and others who need to be “softened” to the idea.
The op-ed cites a study by the center-right Climate Leadership Council that shows U.S. manufacturers emit less carbon in the production of goods than those in other countries. Putting a tariff on goods at the border that are produced in places with less stringent environmental standards is one way to help level the playing field and push other countries to reduce planet-warming emissions, proponents argue.
There’s a key challenge to the prospects of a U.S.-Europe carbon border tax: The U.S. doesn’t put a price on carbon emissions, and Europe does.
Cramer said he believes that a border carbon adjustment can exist without a price on carbon, which he doesn’t support.
“I think the simpler you make it the better,” he said yesterday. “If there is a standard, then if you meet it there’s nothing, and if you don’t then there’s a tariff.”
Merging Trump’s “America First” approach with Biden’s “Made in America” agenda could lead to a foreign trade and climate policy “that survives these crazy political shifts in Washington,” said George David Banks, a former adviser to Presidents Trump and George W. Bush and a fellow at the Bipartisan Policy Center.
The idea of levying carbon fees on imports has earned some support from lawmakers on both sides of the aisle. Cramer said he’s spoken with Sen. Chris Coons (D-Del.) who proposed carbon border tax legislation based on an implied carbon price.
With President Biden’s climate and social spending bill dormant, Cramer said a climate trade policy should be considered.
“I’d rather have an incremental success story than an aspirational goal that we never get started on,” he said. “Let’s focus on an emissions goal, let’s look at solutions, get together and obviously a little compromise, but I think there’s a lot more common ground than people might think if we just sit down and talk about it, and I think this is the lowest hanging fruit, frankly.”
This story also appears in E&E Daily.